OfflineUPDATE: Just got great news... the seller is dealing with another business deal out of town and we wont be able to close until sometime mid week next week! Yay! So, this gives me 5-6 more days to find an end buyer or partner.
Hi yall!
I have a serious problem. I'll start at the beginning, hopefully someone here can help me figure out what to do!
A month ago an old client of mine (Im a Realtor in Dallas, Tx, for those who don't know) called to tell me he wants to sell off some of his portfolio to get some new, bigger properties. I'm thrilled because I know what a good deal he got on them in the first place, and the part of town they're in has seen a huge rise in value over the last five years. So the first property he tells me about (which I'm already familiar with.. I helped him lease it and my ex husband is a contractor who did all the updating to it for him), I immediately wrote up a contract for. I ran the numbers and based on his estimated repairs, I came up with this:
ARV: $340k
Repairs: $25k
Purchase Price: $200k
Great deal, right? So, we're now under contract. I contacted an HML that I've used before, great guy, very helpful. However, it took his appraiser two weeks to even come to the house. I lost my option window before she even showed. To make matters worse, she did an awful job selecting comps. This house is on a quarter acre lot, 2200 sq ft, with 4 bedrooms, 2 baths and 2 living areas. Her first comp was a TWO bedroom! The other two hadnt been updated in 15+ years! She came to the conclusion that my ARV would be closer to $310k, because of this. Appraisers all have their standard sliding scale that they apply when properties aren't identical in size, etc. But this was just not accurate at all. Now we are out of time and my lender won't fund the deal based on her report.
Normally I would just walk away. But here's why I can't. First of all, the seller asked for $1000 earnest money. Being outside of the option period, we'll lose it if we pull out. Not to mention appraiser fees, inspection, foundation report... this is going to be a $2k loss if we walk away. I could take the hit, but you guys... it's not my hit to take. My mother has been living with me for a few years, she had a cancer issue in 2011 and had multiple surgeries and needed a place to stay to recuperate. She wiped out all her savings. She's better now... but when I saw what a great deal this is, I convinced HER to act as the buyer. I thought it would be a great way to get her back on her feet. I'd make my commission for the sale(s) and a cut of the profit for helping run the project, but I wanted her to rebuild her cushion so she doesn't have to work so hard all the time.
With the news that my lender wont fund the deal, we are at a dead end. I can fund the repairs if I have to, but I can't actually purchase the property on my own. I immediately brought it to a few wholesalers in town that I've worked with before, but because of the time crunch they're having trouble finding an end buyer too.
So, I'm coming home... to DG. I've had such luck in the past meeting serious investors and collaborating, working deals together and getting great advice. I'm hoping and praying that this will happen again. We are set to close TOMORROW. If I can't figure something out to at least justify asking for an extension on the close date (we've already extended once.. and I cant be sure he'll give me another one, but if it seems solid I can do my best to convince him), my mom is going to lose the $2k she's already put into it, and it will leave her with a bad taste in her mouth when it comes to this business.
So, here's what I'm looking for. (I can provide detailed info about the project, the property, the comps etc. I honestly don't care how much interest you want to charge as long as we still come out with a little bit of profit at the end of the day.)
1. A cash backer who will fund the entire project for a cut of the profit or fixed interest rate.
2. A cash backer who will fund the purchase of the home for a fixed interest rate and allow me to take care of the repair costs.
3. A cash buyer who will take over the project from us and complete the work themselves, keeping all of the profit. (In this case, as needed, I can be your boots on the ground.. hire contractors, oversee the work, take weekly pics/video to show you the progress if you are not local and can't check on it yourself).
I have already gotten bids for the work.. and I will say this. The seller underestimated the amount of work needed. I have put the scope of work needed based on actual estimates to be closer to $35k. Also after reviewing the more recent comps (we started this a month ago) the ARV will be closer to $335k. This changes the numbers a bit but it is still a really good deal and can be completed in two months or less.
I'm really hoping someone here can and will have a solution for this that doesn't involve us losing this deal. If this sounds like something you have the means to take on, or if you know someone who might, please inbox me! I will answer any questions and provide any information you need. I look forward to working with one of you soon!
Monica
Skeptic, turned hopeful, turned determined!
You will NEVER succeed if you don't try.
oh boy you really waited to the last day didnt you
truly you need to get an extension so I would do that. Secondly I would just wholesale it if I were you bc that is low risk.
I would go to your local real estate investment clubs and pitch this deal in the haves and wants, you should get this wholesaled getting all of your moms money back and prob 7-15k more. I would put it on craigslist too you will get a ton of calls, I would create a postlet(do you have the training on how to do that?) if not google it or postlet has a tutorial i believe.
If you get more time also if you truly want to flip this which i dont recommend there is so much money pouring in to real estate right now so I dont think it would be too hard to find $ to fund this deal possibly even most of the cost. Again-you meet these peeople at the REIA's so do go there and network. HOpe this helps
Tony
Go faster do more! GFDM!
I really did CaliTony! Not by choice tho. The HML I was using didn't confirm he wouldn't fund the deal until this Monday. We discussed transactional funding so I could try to find an end buyer, but the title company refuses to do back to back closings, they require a 7 day filing period inbetween. So I have to either find someone with cash to partner with or assign the contract to. I am working on getting an extension but if I can't find anybody to take it off my hands or fund it, all I'm doing by getting an extension is hurting the working relationship I have with the seller if I end up having to back out anyway. It's all just one big mess that I'm hoping to find a solution to asap. Craigslist is a good idea wish I'd thought of that a week ago. I started to come here Monday but I really thought my wholesaler contacts would have found an end buyer for me by now, considering what a large contact list they all have access to.
Monica
Skeptic, turned hopeful, turned determined!
You will NEVER succeed if you don't try.
Just got great news... the seller is dealing with another business deal out of town and we wont be able to close until sometime mid week next week! Yay! So, this gives me 6-7 more days to find an end buyer or partner.
Monica
Skeptic, turned hopeful, turned determined!
You will NEVER succeed if you don't try.
you can't find someone in DFW that wants a great deal. I'm happy your seller got busy out of town. good luck.....POSTLETS.COM is a great way to get it out there and let more people see it and it's free
ALL THE BEST,
WALT
Thanks Walt, I'm surprised too.. but I didn't have much of a head start. I've only known for a few days that we weren't going to be able to proceed as planned. Doesn't give people much time to find the cash to do the deal. If there are any wholesalers here who would consider distributing it to their buyers list, I am willing to assign the contract!
Monica
Skeptic, turned hopeful, turned determined!
You will NEVER succeed if you don't try.
well im glad you have more time if I were you like I said I would get to the reia's as fast as possible and pitch the deal, create a postlet bc that posts it to Zillow and yahoo and many other sites believe me you will get calls I do all the time when i create my postlets-so get going.
Also, what is it you are trying to do in RE? Are you just wanting to be an agent? I ask bc it is tough to try and get a buyer after you have a deal it is really tough I know i have gone thru that several times and i wont anymore I am wholesaling exclusively annd i have about 100 buyers for san diego county where im at so when i get a deal it is sold period fast.
It is important critical to have a buyers list if you are going to wholesale. Also I am suprised like Walt too since I just read in Personal RE Magazine which i love and recommend an article on Tx and specifically DFW and how hot it is there that props go really really fast so if you cant find a buyer you are doing something wrong Tejanita you feel me
LOL so let us know how it went i wish you much success.
Tony
Go faster do more! GFDM!
well im glad you have more time if I were you like I said I would get to the reia's as fast as possible and pitch the deal, create a postlet bc that posts it to Zillow and yahoo and many other sites believe me you will get calls I do all the time when i create my postlets-so get going.
Also, what is it you are trying to do in RE? Are you just wanting to be an agent? I ask bc it is tough to try and get a buyer after you have a deal it is really tough I know i have gone thru that several times and i wont anymore I am wholesaling exclusively annd i have about 100 buyers for san diego county where im at so when i get a deal it is sold period fast.
It is important critical to have a buyers list if you are going to wholesale. Also I am suprised like Walt too since I just read in Personal RE Magazine which i love and recommend an article on Tx and specifically DFW and how hot it is there that props go really really fast so if you cant find a buyer you are doing something wrong Tejanita you feel me
LOL so let us know how it went i wish you much success.
Tony
Go faster do more! GFDM!
lol well I dont think Im doing anything wrong, per se. I just didnt have any notice at all that this was going to happen. I don't have a buyers list because I am not a wholesaler. If I already owned the property outright, I would put it in the MLS and THATS my buyers list. I'm not sure I can post this thru Postlets either, considering we don't own the property yet? I may be mistaken, I'll look into it. Thanks for the suggestions!
Monica
Skeptic, turned hopeful, turned determined!
You will NEVER succeed if you don't try.
If you have it under contract, you can put it on Postlets. Once it is under contract, you have "equitable interest" in it and can advertise it as you want.
Karen
"You're never too old to be what you were meant to be!"
www.deangraziosi.com/real-estate-forums/investing-journals/59128/day-for...
"Shining Like a Star & Dancing on Sunshine"
"Shoot for the moon! Even if you fall short, you'll still land among the stars!"
Ok tejanita so what are you trying to do in RE, just asking. YOu want to flix n flip? or buy n hold? You are an agent that is great but this site is for investors is why I ask
Tony
Go faster do more! GFDM!
CaliTony, I dont understand why you continue to ask me that question. I have done several flips, some of my own, some with a partner, and others I have managed for clients. I have been a member of this site for years and I have contributed to many conversations, I am not fishing for clients nor am I advertising myself. Karen and I are actually longtime FB friends. I may be jumping to conclusions but it feels like you're gearing up to tell me to stay off the site, and unless an admin chooses to tell me to do that, I don't see how that's your place. Just because I have a license doesn't mean I am not legitimately interested in Dean's methods and the investment side of real estate.
Monica
Skeptic, turned hopeful, turned determined!
You will NEVER succeed if you don't try.