ScottZavoda 0 Report post Posted May 28, 2010 Been working this for awhile now. As a new investor I read... read.... implement...... hit obstacle...read... get confused and try harder. Tomorrow I'll be putting the second slice of bread on I hope. My last T/B was a done deal I thought until it was time to bring me a bank check for the down payment money. He didn't have it. Picked up someone else from an open house last week and they seem to be a good fit. They are working to improve credit but self employed so I recomend they start talking with a lender like this week to begin the process. Here's the dealMy price 185KMy rent 1200Upfront to seller 1KMarket price 205KMarket rent 1600Deposit from buyer 4K Term only 1 year.Lease purchase This is exciting but really scary for me. I'm a realtor as well but this is a little different. Already I made the mistake of letting other realtor involved choose a title company. Whey they said "what's transactional funding?" That made me a little nervous. Guess we can change last min if I have to. What I'm unsure of is closing costs and how to structure these better in this kind of agreement. Used to working with normal buyers and sellers and standard contracts. Now I'm trying to modify Wendy P's stuff and also have Kris Kirchners materials. All of theirs demand anyone but me pays for all closing costs. Buyers and sellers have all balked at this. Any suggestions of how you write these up? Also since this is lease purchas is filing a Memoradum of Option the same as it would be with a Lease Option? Tomorrow T/B is doing an inspection. Hope they show up and all goes well. I've only got 2 days left to call the whole thing off with seller or else I'm commited Share this post Link to post Share on other sites
Doug Pretorius (ON) 9 Report post Posted May 28, 2010 Sounds like a nice deal, hope it works out for you! I was just wondering how you approached the seller on this one? As a realtor working your own deal, as a property manager, as an investor...? Share this post Link to post Share on other sites
ScottZavoda 0 Report post Posted May 28, 2010 Sounds like a nice deal, hope it works out for you! I was just wondering how you approached the seller on this one? As a realtor working your own deal, as a property manager, as an investor...? Yeah being a realtor I found has been both tricky and helpful. I think once I learn more of the legalities it will be more of a positive than a negative. I previewed the home myself as a realtor and actually put it under contract through my brokeredge as this property was listed for a normal sale through another real estate agent. The home had been sitting for nearly a year and I approached the other agent and told her I also do some real estate investing and explained the whole SLO thing to her. She said at that point her clients would be open to anything. So we structured the deal for 2 months for me to find a T/B for the home. I gave them the right to continue advertising it the normal way as well so the sellers wouldn't feel like the property was tied up. The other agent ended up making it a contingent status anyways which I don't think was smart of her... don't think she had to do it that way. On the selling side it is not going through the company but I am disclosing that I'm a licensed realtor. I talked to the local board and they said selling on your own is perfectly legal as long as you disclose to everyone the entire situation. Update though as of this morning. Inspection did not go well at all so this whole thing may fall apart by the end of the day. This is a lot harder than it seems sometimes. My mistakes to learn from are this. Didn't get the home cheap enough in the first place. Didn't do my own home inspection first. Shouldn't of included a time frame on my contract with the seller. Any other real estate agents on here doing SLO's. Any advice on the whole assignment fee thing and if you should list it through your brokeredge if you are going to assign the contract. Share this post Link to post Share on other sites
MichaelC 160 Report post Posted May 28, 2010 UORE, sorry I'm late in replying. A bit busier than I like all day yesterday and this morning.The numbers are marginal, at best. I'm not thrilled with the $20K spread or the one year term. You mentioned making a $1K option consideration payment to the homeowner. Is this coming out of your pocket or due when you receive your option money from the t/b?No mention of any rent credits. Are there any involved? Share this post Link to post Share on other sites
ScottZavoda 0 Report post Posted May 28, 2010 UORE, sorry I'm late in replying. A bit busier than I like all day yesterday and this morning.The numbers are marginal, at best. I'm not thrilled with the $20K spread or the one year term. You mentioned making a $1K option consideration payment to the homeowner. Is this coming out of your pocket or due when you receive your option money from the t/b?No mention of any rent credits. Are there any involved? Thanks for the reply. No out of pocket to the seller until T/B pays me. When the deal first went under contract I thought it would be worth a little more like around 210 but there have been some foreclosures around there in the last few months. You're right the spread wasn't huge but I was looking at 400 / mo cash flow for a year to add to that spread. No rent credit to either side. Do you see anything unethical about previewing homes as a realtor then putting them under contract and assigning the contract to a T/B as I'm a realtor. Would it be a procuring cause conflict of interest possibly to my brokerege? Thanks Share this post Link to post Share on other sites
MichaelC 160 Report post Posted May 28, 2010 I don't see anything unethical in your approach, UORE. But then, I'm not a Broker. There are several Agents on board here. Jonathan Rexford and HiltonHeadInvestor come to mind. You might want to run this by them for their opinions. Share this post Link to post Share on other sites
vballdarin 1 Report post Posted May 28, 2010 Hey there UORE.... A long time ago, in a land far away, I was a licensed Real Estate Agent. I was new to the whole Investing thing and when I had mentioned what I was looking to do (such as Sandwich Lease Options, CA's, etc....) to my Broker's in Charge they gave me the typical runaround,.... they felt uncomfortable with the whole process, hence, I ditched my license so that I could do what I wanted to the way I wanted to. My Brokers would not let me sell the property myself unless there was some type of compensation for them as "THEY" were the one's who may be culpable with such a "untraditional" deal. I DO know that as long as you disclaim and disclose, then disclaim and disclose again, then it should be a pellucid* transaction between all parties. *I learned a new word and want to use it every chance I get. [backstory----> A few days ago I thought I was getting a house under contract (a Coop Assign) but the owner emailed me back and said the paperwork was way too onerous . I replied by saying that I understand his concern but we strive for everything to be fair and pellucid. ] Share this post Link to post Share on other sites
MichaelC 160 Report post Posted May 28, 2010 A few days ago I thought I was getting a house under contract (a Coop Assign) but the owner emailed me back and said the paperwork was way too onerous .That's nonsense. The paperwork we use is anything but. In fact, it was designed specifically for the average homeowner to read and understand without the need to run to an attorney. I can only conclude this homeowner was a dunce or just looking for a way out. Share this post Link to post Share on other sites
ScottZavoda 0 Report post Posted May 30, 2010 Hey there UORE.... A long time ago, in a land far away, I was a licensed Real Estate Agent. I was new to the whole Investing thing and when I had mentioned what I was looking to do (such as Sandwich Lease Options, CA's, etc....) to my Broker's in Charge they gave me the typical runaround,.... they felt uncomfortable with the whole process, hence, I ditched my license so that I could do what I wanted to the way I wanted to. My Brokers would not let me sell the property myself unless there was some type of compensation for them as "THEY" were the one's who may be culpable with such a "untraditional" deal. I DO know that as long as you disclaim and disclose, then disclaim and disclose again, then it should be a pellucid* transaction between all parties. *I learned a new word and want to use it every chance I get. [backstory----> A few days ago I thought I was getting a house under contract (a Coop Assign) but the owner emailed me back and said the paperwork was way too onerous . I replied by saying that I understand his concern but we strive for everything to be fair and pellucid. ] Thanks for the insight. My other though was this: If I'm finding deals not listed on the MLS then I just come in and disclose as you say and never do anything in my brokers name. In fact I don't even have to disclose which one I work for... only that I'm a licensed realtor I would guess. However if I do find one on the MLS maybe it would make more sense to let the other agent represent me in the transaction as well.... this would possibly do more to get the other realtor on board knowing a higher payday is coming. I would be giving up any commission due to me of course. The only pitfall I can see here is my broker finding out and complaining that they were somehow the procuring cause. Share this post Link to post Share on other sites
Doug Pretorius (ON) 9 Report post Posted May 30, 2010 Thanks for the insight. My other though was this: If I'm finding deals not listed on the MLS then I just come in and disclose as you say and never do anything in my brokers name. In fact I don't even have to disclose which one I work for... only that I'm a licensed realtor I would guess. However if I do find one on the MLS maybe it would make more sense to let the other agent represent me in the transaction as well.... this would possibly do more to get the other realtor on board knowing a higher payday is coming. I would be giving up any commission due to me of course. The only pitfall I can see here is my broker finding out and complaining that they were somehow the procuring cause.Sounds like you need to become a broker yourself. Too many sentences include the words: "...but if my broker..." Share this post Link to post Share on other sites
vballdarin 1 Report post Posted May 31, 2010 UORE... I was told that in South Carolina (and I think I read it somewhere too) that you disclose your licensed status as well as which Brokerage is holding your license. As I'm sure many other people on the forum would suggest....the less Agents involved = the better. Your Broker can't have it both ways. He/she either lets you do your own deals...or they don't. If you happen to find one on the MLS, I would suggest treating it like a normal transaction, keeping all parties in a traditional role. Sometimes they will let YOU forfeit your commission (while giving your Broker his/her split) or credit it to the other party at closing. But then things start getting more and more complicated. Simple is better; less people is easier. Darin Share this post Link to post Share on other sites
BEV! 0 Report post Posted July 11, 2010 ----> A few days ago I thought I was getting a house under contract (a Coop Assign... Chin up mate... U know, I've been thinking about why is it that some people have problems getting owners to say YES? I could no longer help myself, so I went ahead and sent an email to a FRBO in your immediate area last night just to see what they would reply, well today I got a reply from that "one" email I sent and here's the very first thing the owner says in his reply............. " Thank you for your email. Yes I am interested......" Trust me, there are lots of homeowners interested in what you're offering (CA) and need you right in your back yard Anyway, let me know if you want the rest of this person's email reply so you can proceed with this house as from this point on, is up to you to turn this prospect into a deal, and if not, then move on to the next one and life goes on... BEV! Share this post Link to post Share on other sites
Jason (AL) 1 Report post Posted July 11, 2010 Aww, how sweet of you, Bev! Do you simply ask if they would be interested in ______?What goes after that? Share this post Link to post Share on other sites
BEV! 0 Report post Posted July 12, 2010 Aww, how sweet of you, Bev! I know, huh? Do you simply ask if they would be interested in ______?What goes after that? Mr. Darin has all the info now ( I just don't want to paste it publicly on here ) Share this post Link to post Share on other sites
bwalston 1 Report post Posted July 12, 2010 Hi Bev - That WAS very nice of you to forward the info along to Darin :-) Would you care to share the email that you sent to the landlord? I'm always looking to add to my marketing arsenal. And speaking of which, don't I remember that you were putting together an eBook on marketing? Aww, how sweet of you, Bev! I know, huh? Do you simply ask if they would be interested in ______?What goes after that? Mr. Darin has all the info now ( I just don't want to paste it publicly on here ) Share this post Link to post Share on other sites
