Author Topic: Making offer/cash closing time?  (Read 10222 times)

Longwaytogo

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Making offer/cash closing time?
« on: January 23, 2014, 12:07:09 PM »
So two part question-

1. I am almost ready to pull the trigger for an offer for my first "fix and flip" attempt. Reading through some other threads it sounds like a "verbal offer" is not the best way to go. Seems the popular opinion is a written offer with earnest money is taken more seriously ( I tend to agree). So property in question is 25K, on the market for 120 days. I'm thinking of offering $17,500, split closing costs, all cash, as-is no inspection. (realistically thinking closer to 20-21K would work but wanted to start here and hopefully get a counter) How much earnest money would I need in a situation like this, and I assume my Realtor just holds the check, no actual money changes hands right?

2. Do all cash deals typically happen faster or is a 30 day closing still pretty typical? My preference is sooner the better so I can start obtaining permits, zoning applications, start work etc. to get back on Market as soon as possible.  Just wondering how long it takes to get title/settlement stuff done if there is no Mortgage, appraisals, inspections etc.


arebelspy

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Re: Making offer/cash closing time?
« Reply #1 on: January 23, 2014, 01:17:45 PM »
1.  Up to you.  1000 is typical.  It will go to the title company, and be deposited (and refunded by, if the deal falls through with no fault of your own) by them, and count towards your closing money.

2. Depends on the title company.  A cash deal typically closes quicker than that, as long as title can pull everything they need fairly quickly.

If you're using a Realtor, these are good questions for them (not that you can't ask here as well, but that's what they're there for, helping you with the transaction).
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Guizmo

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Re: Making offer/cash closing time?
« Reply #2 on: January 23, 2014, 02:20:31 PM »
I bought my condo cash (though I borrowed from family to do so). I had my brother - a real estate agent - draw up the contract. Deposited the earnest money at the title company and 2 weeks later we were signing all the papers.

arebelspy

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Re: Making offer/cash closing time?
« Reply #3 on: January 23, 2014, 02:30:34 PM »
It'll also depend on what the sellers want - they may need more time before closing escrow.

COE is something you'll put in your offer.
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CommonCents

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Re: Making offer/cash closing time?
« Reply #4 on: January 23, 2014, 02:55:38 PM »
So two part question-

1. I am almost ready to pull the trigger for an offer for my first "fix and flip" attempt. Reading through some other threads it sounds like a "verbal offer" is not the best way to go. Seems the popular opinion is a written offer with earnest money is taken more seriously ( I tend to agree).

Just an FYI, but the US follows English law and requires certain contracts (such as conveyance of real property) to be in writing. 

dragoncar

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Re: Making offer/cash closing time?
« Reply #5 on: January 23, 2014, 03:25:29 PM »
So two part question-

1. I am almost ready to pull the trigger for an offer for my first "fix and flip" attempt. Reading through some other threads it sounds like a "verbal offer" is not the best way to go. Seems the popular opinion is a written offer with earnest money is taken more seriously ( I tend to agree).

Just an FYI, but the US follows English law and requires certain contracts (such as conveyance of real property) to be in writing.

Right, but verbal is good for hammering out what to actually put into writing.

GoCubsGo

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Re: Making offer/cash closing time?
« Reply #6 on: January 23, 2014, 03:41:54 PM »
Realtor here- Absolutely put the offer in writing (it only takes a few minutes to write up a contract and the details of the contract should have already been explained by your Realtor).  My take on earnest money is that it is just another piece of the offer that can make it look more attractive.  If the deal falls apart (assuming you do your part to live up to the contract) the EM is returned (the EM isn't given/credited to the seller until closing and in Illinois is held in escrow should a dispute arise).   I always put large EM deposits down as it can only help with your offer (especially if another offer comes in).  Your Realtor can give you guidance on what it customary on deals of that size but I put minimum of 5% sometimes up to 10%.  As always, laws are specific to individual states so consult your attorney before acting on any advice.

Longwaytogo

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Re: Making offer/cash closing time?
« Reply #7 on: January 23, 2014, 05:57:09 PM »
Thanks all!

 My Realtor said most of the Cash deals he has done still end up taking close to 30 days while the title work is done. Its a 100+ year old house in the city with some question on the existence of ground rent so I'm guessing the title search could be slow/lengthy.  But he said he could talk to his normal title company and see what they think about turning it around quicker

Seems like seller would be ready to go soon too (no tenants or anything) Guess putting COE in the contract makes sense too.

He seems to think the Earnest money is not necessary and to just do written offer? Guess I'm not sure which way to go here. A 10% EM would be $1750, or just do the $1000 as Arebelspy suggested.

Another question (I'm pretty new to this Real estate game) - At what point do you involve your settlement attorney? My father has a guy he has used on 12-15 houses (through his construction business) that I would like to use. Would I contact him if/when an offer is accepted so he can follow/assist with title search/insurance etc. or is he only involved at the actual settlement-



Fishingmn

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Re: Making offer/cash closing time?
« Reply #8 on: January 24, 2014, 05:41:31 PM »
Most cash deals in MN take 15-30 days but 20 is pretty common.

On such a small deal $1,000 would probably be okay but $1,750 better.  A lot of bank owned, cash deals require 10% around here so that's somewhat the norm.

Title/settlement should be informed right away.  Typically (as a Realtor) I take the final signed contracts and forward them immediately to the title company upon an accepted/executed contract (as well as sending them to the lender if there is one which doesn't apply in this case).

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Re: Making offer/cash closing time?
« Reply #9 on: January 24, 2014, 08:16:23 PM »
Ground rent?  Is this house on leased land?  Being in the sandwich position on a ground lease can be very risky.  Also, when the ground lease, including options, expires, the improvements either revert to the landowner or must be removed.  You have no further interest in the property at that point.  They don't work for fix and flip, unless the retail buyer is an all cash buyer and is familiar with the limited income stream of ground leased properties.  They are almost impossible to finance.  Ground leases require a lot of income analysis and generally should be avoided, especially in the case of a 100 year old house and a first time investor.

Longwaytogo

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Re: Making offer/cash closing time?
« Reply #10 on: January 25, 2014, 06:03:23 PM »
Ground rent?  Is this house on leased land?  Being in the sandwich position on a ground lease can be very risky.  Also, when the ground lease, including options, expires, the improvements either revert to the landowner or must be removed.  You have no further interest in the property at that point.  They don't work for fix and flip, unless the retail buyer is an all cash buyer and is familiar with the limited income stream of ground leased properties.  They are almost impossible to finance.  Ground leases require a lot of income analysis and generally should be avoided, especially in the case of a 100 year old house and a first time investor.

Seems to be a Baltimore city thing. There are over 100,000 houses in the city that still have existing ground rent on them so I don't think they are impossible to finance. Maryland passed a law that you are allowed to buy it out for 10-12 times the annual fee ($75-$150 a year) so it's typically not an issue. This one is just a bit odd because in the listing it says "buyer to verify existence of ground rent". According the the Maryland government website no ground rent exists so I'm just not sure why the owner/listing agent would not have checked that instead of having a red flag in the listing. We were planning on having contingency of clean title/no ground rent or ground rent able to be bought in our offer.

My Realtor is still convinced we don't need Earnest money, just offer? So I don't know what to do. Current owner is another "investor" landlord type with multiple places for sale around city. Not sure if/how that affects strategy.

Longwaytogo

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Re: Making offer/cash closing time?
« Reply #11 on: January 27, 2014, 07:48:14 AM »
Making offer today, checked house out yesterday. House is in a bit worse shape then we thought, mainly the roof. We decided to start with 15K instead of 17.5. all cash, no inspections, close of escrow Feb 24. We'll see what happens, hopefully they will at least counter and not disregard completely.

Hamster

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Re: Making offer/cash closing time?
« Reply #12 on: January 27, 2014, 12:21:07 PM »
I would just add for other readers that the minimum length of time til closing on a cash deal is very location-dependent. Where I live, especially on houses targeted toward cash investors (needing lots of rehab), the listing agent often has the title company pull the title report at the time they list. There is some risk to the title company since the buyer could insist on using a different company,and they wouldn't get paid for their title work but that rarely happens.

It's not unusual for cash deals to close in 7-10 days here.

Cassie

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Re: Making offer/cash closing time?
« Reply #13 on: January 28, 2014, 03:22:35 PM »
We have bought homes with only 500 down at title company. That is about as low as you can go.

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Re: Making offer/cash closing time?
« Reply #14 on: January 29, 2014, 10:37:03 AM »
+1 to all the people who've said its time dependant.

I've seen them close in a week in Georgia if the house is currently owned free and clear and the buyer/seller/attorney are in the same county.

That's about the fastest.  2-4 weeks is pretty normal

Longwaytogo

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Re: Making offer/cash closing time?
« Reply #15 on: January 29, 2014, 10:49:34 AM »
So we ended up stating closing of escrow for Feb 25 or sooner dependent on title work.  Sooner the better for us so we can start work and get it back on market! If we come to an agreement I'll probably go back up to get more accurate measurements and draw all my plans so I'll be ready to apply for permits right after settlement.

By the time my partner/realtor got all the info together the offer didn't get over until yesterday afternoon. So not sure when we'll here back. A mix of excitement/nervousness/pessimism that he will not make a counter we can do.  We'll see what happens...

Longwaytogo

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Re: Making offer/cash closing time?
« Reply #16 on: March 18, 2014, 01:27:49 PM »
So we ended up stating closing of escrow for Feb 25 or sooner dependent on title work.  Sooner the better for us so we can start work and get it back on market! If we come to an agreement I'll probably go back up to get more accurate measurements and draw all my plans so I'll be ready to apply for permits right after settlement.

By the time my partner/realtor got all the info together the offer didn't get over until yesterday afternoon. So not sure when we'll here back. A mix of excitement/nervousness/pessimism that he will not make a counter we can do.  We'll see what happens...

So I have not fallen off the face of the planet. Just been off the boards for a while. The house I mention above had a pretty unresponsive owner and agent. We heard nothing for 2-3 weeks despite my agents attempts to follow up. Then they email on a Friday afternoon saying they are comparing our offer to another over the weekend and would we like to "improve our offer".  At that point I was debating weather I even wanted/had to honor my initial offer. We responded that we didn't want to improve but would still go with our original and would consider a counter. They emailed back Monday that they were working with the other offer.

So we have been checking out a bunch more places online and in person. Found another we like and are most likely going to put in an offer Friday. So we will see how it goes!

DoubleDown

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Re: Making offer/cash closing time?
« Reply #17 on: March 18, 2014, 02:13:17 PM »
The house I mention above had a pretty unresponsive owner and agent. We heard nothing for 2-3 weeks despite my agents attempts to follow up. Then they email on a Friday afternoon saying they are comparing our offer to another over the weekend and would we like to "improve our offer".  At that point I was debating weather I even wanted/had to honor my initial offer.

I always put in an expiration on any offer, typically 24 hours. That way, the seller doesn't have any significant time to shop your offer around to other potential buyers, and you are not in legal limbo wondering if your offer is being considered and possibly accepted. You don't want to find yourself in a situation where a better property comes up that you want to buy, but cannot because your previous offer on the other property is still hanging out there. Or, you end up with two accepted offers! Maybe something to consider on future offers. Good luck!

dragoncar

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Re: Making offer/cash closing time?
« Reply #18 on: March 18, 2014, 02:32:13 PM »
The house I mention above had a pretty unresponsive owner and agent. We heard nothing for 2-3 weeks despite my agents attempts to follow up. Then they email on a Friday afternoon saying they are comparing our offer to another over the weekend and would we like to "improve our offer".  At that point I was debating weather I even wanted/had to honor my initial offer.

I always put in an expiration on any offer, typically 24 hours. That way, the seller doesn't have any significant time to shop your offer around to other potential buyers, and you are not in legal limbo wondering if your offer is being considered and possibly accepted. You don't want to find yourself in a situation where a better property comes up that you want to buy, but cannot because your previous offer on the other property is still hanging out there. Or, you end up with two accepted offers! Maybe something to consider on future offers. Good luck!

You can also explicitly revoke your offer at any time.

Longwaytogo

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Re: Making offer/cash closing time?
« Reply #19 on: March 19, 2014, 06:27:23 AM »
I asked my agent about putting a time limit my offer. He say it was unnecessary/ uncommon. But I'm going to insist on one this time to avoid the exact situation you mention. The current one we are looking at is for owner/ occupants only until Monday the 24 (some Fannie Mae thing) but seems to be a pretty good price so not sure if we will have immediate competition or not.

My agent mentioned something about like auto escalators where we could start low and go all the way up to list if we wanted. Anyone else heard of this? The house is at 25k and from our research/shopping seems very similar to many we have seen in the 30-40k range. I am shopping off the MLS and have been told/am aware this is not how most flips are done but for now think this is how I'm starting.

arebelspy

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Re: Making offer/cash closing time?
« Reply #20 on: March 19, 2014, 06:34:23 AM »
Auto escalators were super common in 2004-6 and have been coming back in certain markets.

To be blunt: How the hell do you expect to do a profitable flip paying market prices?  Escalating your offer to be literally the highest one?

Fuck no, stay away.

You are not an owner occupant.  Your agent is treating you like one.  You are going to learn some painful lessons.

/apologies for the face punch.
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Longwaytogo

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Re: Making offer/cash closing time?
« Reply #21 on: March 19, 2014, 08:02:40 AM »
No apology necessary, if I did not want face punches I would not come on here asking dumb/rookie questions!

I'm not inclined to do the auto escalator, just curious about them I guess. The house right next store of the exact same layout sold for 32K last year so I feel like 25K is a fair market price. I understand its not a steal/deal that many flippers want/need.

I expect to make money as a general contractor/skilled (and unskilled) laborer. If I can buy at 25K, remodel for 50K and sell at 110K (obviously 120 would be better) then I could make 10-12K. Granted this may end up equating to $20 an hour or less (hopefully like $35 is more what I have figured). Granted this is basically just a risky/stressful part time job not huge "house flipper" type #'s like you see/hear on tv. But I'm willing to accept it as an education while I learn the ropes/build capital/trust with investors etc. Then I can try in more expensive markets with better/higher returns.

I've been involved as a contractor on 20-30 flip/investment type deals and they have all gone well. Just frustrating doing all the physical work while the buyer/investor/bank make all the money. So I would like to try my hand at being on the other end. I'm guessing I'm in for some painful lessons on the buy/ sell/ transaction/ loans stuff, but have a pretty good idea on the gut/ remodel/ permit/ stage stuff so hopefully my surprises/overages on that end will be less then the average first time flipper.

I could just have my head in the sand and be blinded by my desire to do this. But my partner and investor have faith in me and like this place and the last one we put an offer on. So hopefully I'm not totally off base. Granted I could just keep on being a general contractor and making my 50-60K a year working for clients with no risk; but even being self employed your client is still basically your "boss". In only 15 years of doing this I'm already sick of the sales/marketing, holding peoples hands while they shop at 5 tile shops for the powder room floor etc. I love doing the actual work but not all the additional BS. I just want to remodel making decisions on the fly, buying shit on sale in what ever color is in stock I like and just get shit done.

arebelspy

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Re: Making offer/cash closing time?
« Reply #22 on: March 19, 2014, 08:08:14 AM »
Sounds like you're approaching it like a hobby, not a business.

I wish you the best of luck.  :)
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Longwaytogo

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Re: Making offer/cash closing time?
« Reply #23 on: March 19, 2014, 02:05:13 PM »
Sounds like you're approaching it like a hobby, not a business.


Ok? Guess I'll have to disagree with you there, none of my hobbies produce any income.


arebelspy

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Re: Making offer/cash closing time?
« Reply #24 on: March 19, 2014, 02:09:11 PM »
Hopefully this one will.
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the fixer

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Re: Making offer/cash closing time?
« Reply #25 on: March 19, 2014, 02:37:07 PM »
Longwaytogo,

Have you considered walking around neighborhoods looking for vacant/abandoned properties? Causally asking homeowners if they know of any houses for sale in their neighborhood or owners who might be interested in selling?  MLS is an easier way to find properties but you should also at least try other methods. I'm in a somewhat similar situation and am just learning by doing.

Since I'm pursuing a house right now without any agents involved, I have some similar questions regarding what's going to come up when offers and closing start to happen. Should I meet with the seller somewhere and hammer out a contract right then, negotiating verbally with everything? Should I just download a contract online to start from? Should I expect the seller to already have a title company involved? If the seller wants to "think about" my offer for a while, is there some kind of premade written offer I should give to them (with an expiration of course)? What info should I give the seller about my mortgage lender, since I figure they might want to verify that I actually am able to follow through on the offer I gave them?

Longwaytogo

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Re: Making offer/cash closing time?
« Reply #26 on: March 19, 2014, 02:45:03 PM »
Guess I set myself up for that one.

Well I'm hoping this will be a successful business venture, not a semi- profitable hobby.  Only time will tell which way it goes I suppose.

DoubleDown

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Re: Making offer/cash closing time?
« Reply #27 on: March 19, 2014, 02:58:24 PM »
No worries Longwaytogo, we all started out with no experience. This will become easier as you get more experience and comfort with it.

I agree on the auto-escalation clause: No way.

Putting a time constraint on a contract may be a regional thing. Good for you for insisting on it either way. One thing you'll learn is that real estate agents always want to do things as smoothly and easily for them as they can, and they are not lawyers (usually). If you continue to use agents, it won't be unusual at all for you to insist on doing things that they will claim are unusual or unorthodox, but you should insist on them nonetheless.

I'm not a house flipper, so I don't recall the target investment amount flippers typically look for, but I think the target is probably a maximum of somewhere around 70% (someone with experience please feel free to jump in and correct here as needed). That is, someone flipping a house for business/profit would expect a final sale price that puts their total investment amount at 70% of the sale price. So, if I thought I could buy, fix up, and sell a house for $100k, I would expect to put no more than $70k of my own funds into the purchase, materials, labor, carrying costs, financing, etc. Then of course there are transaction costs at both ends. That assumes you are hiring the labor -- since you are planning to do some or all of the labor yourself, you would be looking for an even larger margin (like 50%, perhaps).

So, yes, it appears you may be treating it more as a hobby/learning experience. If you are putting $75k of your own money PLUS labor into a $110k house, you might be closer to 90-100% invested. That's okay, but lots of folks (myself included) would never invest that kind of money, time, and energy into such a low expected gain. Might as well just be a contractor and earn that $20/hour on someone else's investment risk, or just buy a Vanguard fund and forget about it.

I'm definitely not trying to discourage you, and I doubt Arebelspy is either -- probably the opposite. I think you're setting your sights/expectations too low, and should seek out a deal where you will be at that 70% MAXIMUM, with no labor on your part. Or if you want to do the labor, maybe 40-50%. This will give you some wiggle room when things go bad (which they will, there's almost always something that comes up), and hopefully a decent profit margin that makes your effort worth it.

That means paying bottom dollar for the house; minimizing or eliminating transaction , financing, labor, and construction costs; researching your property carefully; having your legal representation, insurance, and personal liability ducks in a row; investing minimally to fix it up and only in ways that return profit; and lots of other things. Maybe do a little more research and figure out what you hope to get out of it??? But for me, I wouldn't put any more than $75k TOTAL into a house that I expected to sell for $110k, and that would be without me ever lifting a hammer.

You won't like it when you realize, as you're on your 1000th hour ripping out toilets, floors, drywall, that your real estate agent made as much on the deal as you! So don't be discouraged, maybe just set the bar much higher and see if you can get that 30+% return, instead of 10% AND busting your ass in construction. Good luck!

arebelspy

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Re: Making offer/cash closing time?
« Reply #28 on: March 19, 2014, 03:26:20 PM »
Well I'm hoping this will be a successful business venture, not a semi- profitable hobby.

Then approach it like a business.   Don't accept mediocre numbers because that's what's easily available.

:)
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Longwaytogo

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Re: Making offer/cash closing time?
« Reply #29 on: March 19, 2014, 07:31:57 PM »
Hello All,

Yeah I mean you guys are not wrong..... just trying to figure out other options. I guess I just keep coming back to needing more capital to flip in a better area with more potential. I was/am thinking of this as sort of a stepping stone to build my knowledge and cash.

But I don't know maybe I'm better off slugging away at the carpentry a few more years while I pinch my pennies and then try and flip in a few years.

Problem is I've been saying the above sentence for 12 years since I remodeled my first Baltimore city row-home in 2002. Still have not flipped a house, still have no pennies pinched. So I have been thinking its shit or get off the pot time and I guess willing to take/make less money for it. Maybe that's dumb, I don't know.... probably too costly to gamble my time/money.
« Last Edit: March 19, 2014, 08:13:35 PM by Longwaytogo »

the fixer

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Re: Making offer/cash closing time?
« Reply #30 on: March 19, 2014, 08:27:44 PM »
I should throw in that I was almost sucked into the same logic here, considering a house that would have been a ton of work to fix up but hey, I can do it myself and learn a ton, right? Then I learned about the 70% rule and realized it's a bad deal to value my time at 0. I should be getting compensated in some serious equity for rehabbing a property. The comment above that the RE agent would make more money on the sale of the house than I would as the buyer is a great way to put it.

You have other options of course:
Find a partner who also wants to do a DIY fix and flip, and go 50/50 on a deal twice as big.
Look harder for a seller who desperately needs to sell the house TODAY. If you come to them at just the right time and offer cash for their house...

What did it for me was looking on Zillow at recent home sales. Look for the houses that sold at rock-bottom prices. If you can afford those prices, it's just a matter of making one of those deals for yourself.

arebelspy

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Re: Making offer/cash closing time?
« Reply #31 on: March 19, 2014, 08:48:09 PM »
Yeah I mean you guys are not wrong..... just trying to figure out other options. I guess I just keep coming back to needing more capital to flip in a better area with more potential. I was/am thinking of this as sort of a stepping stone to build my knowledge and cash.

But I don't know maybe I'm better off slugging away at the carpentry a few more years while I pinch my pennies and then try and flip in a few years.

Problem is I've been saying the above sentence for 12 years since I remodeled my first Baltimore city row-home in 2002. Still have not flipped a house, still have no pennies pinched. So I have been thinking its shit or get off the pot time and I guess willing to take/make less money for it. Maybe that's dumb, I don't know.... probably too costly to gamble my time/money.

That's all the more reason, IMO, to get a good deal.  You've waited this long, a few more months to get it right versus jumping in.

It's true that nothing will teach you like experience.  May be just me though, but I like to profit lots while learning.  ;)

And I don't see how the "pinching pennies" thing comes into play at all.  It sounds like you have a partner/investor, so the "waiting years and pinching pennies" is not relevant, just a fake excuse why you have to buy now, because you don't want to wait for that.  You don't have to wait for that with your partner.

And having a partner/investor is all the more reason to make sure it's profitable.

The 70% rule for flips is pretty solid - while the 50% rule on rentals is more disputed, almost no one argues with the 70% rule for flipping.  The key to it is nailing your rehab estimates and your ARV.

Start making some lowball offers.  Don't worry about your realtor - get a new one if you need.

Getting the first house you make an offer on is not a good thing.
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Longwaytogo

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Re: Making offer/cash closing time?
« Reply #32 on: March 20, 2014, 12:20:36 PM »
So multiple replies to above points-

I agree waiting a few months will not make or break me. Although I do have much more time to dedicate during Summer months to the actual physical work part due to my wife's teaching schedule and me being freed up from my kid watching duties.

The "pinching pennies" only comes into play if I could be a partial investor I wouldn't have as many hands in the cookie jar splitting profit. I.E> I get paid as investor and contractor. However I have years before this could happen due to my previous non-mustachain ways and my desire to be a stay at home dad until my kids start public school. So I would rather move forward with investors then sit on sidelines another few years

Yes I agree my partner/investor certainly need a profit!

My 50K of rehab cost includes 10K of my labor (400 hours @ 25) which is why I was hoping to make more like $35-40 with my share of the profit. But I understand this deal is probably too tight even with that. I need to get closer or better then the 70% rule.. just need to figure out where/how.

@fixer - yes I have one partner to split profit with 50/50 already and a second investor funding rehab for a fixed percent return. Idea being partner buys house and helps with some work (mostly grunt/unskilled), investor funds rehab, and I manage and do the majority of the work. Of course doing a deal twice as big can make the numbers work better but my partner and investor both have a budget also. Obviously I can look for better/bigger investors but that's not the easiest thing to do either. I know plenty of people who got killed in the downturn and are pretty weary of real estate now.

All that being said the particular house went under contract today to an owner/occupant so we will not have opportunity to bid on it anyway. Back to the hunt...

So far my Realtor I think has been good, happy to show us whatever we want, follows up on emails etc. He was fine with the first low-ball we made; it was the listing agent on that one who was un-responsive and shitty.

arebelspy

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Re: Making offer/cash closing time?
« Reply #33 on: March 20, 2014, 12:28:06 PM »
Sounds good then.  Good luck!
I am a former teacher who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and am now settled with three kids.
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Numbers Man

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Re: Making offer/cash closing time?
« Reply #34 on: March 20, 2014, 02:03:53 PM »
Now is a good time to dump your Realtor. I always put a time limit on my offers so that I can immediately move on if I can't work out a deal within a few hours. Any Realtor that doesn't present your offer in the way you want it presented (unless it's against the law) is not representing your interests. About the escalation deal, it's like showing everyone your cards at the poker table before everyone bets.

arebelspy

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Re: Making offer/cash closing time?
« Reply #35 on: March 20, 2014, 02:40:38 PM »
Now is a good time to dump your Realtor.

Yup.  Offer wasn't accepted, good time to part and thank them for trying.

Try to find an agent that understands investing.

Stick with your if you'd like, but if you're considering it, now is a good time.
I am a former teacher who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and am now settled with three kids.
If you want to know more about me, this Business Insider profile tells the story pretty well.
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warbirds

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Re: Making offer/cash closing time?
« Reply #36 on: March 23, 2014, 09:24:29 PM »
Investing in low value Baltimore city properties is like inventing a time machine to ride on the Titanic.

Have you considered Harford county, or Carrol County?

You could potentially find a better property of equal cost maybe out near APG.

Keep us posted!

Longwaytogo

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Re: Making offer/cash closing time?
« Reply #37 on: March 24, 2014, 02:40:07 PM »
I have not really had issue with my Realtor. On the first offer I just asked him if we should have a date/cap on the offer and he said it was unnecessary. I took him at his word but since then my research/experience has shown otherwise. So on the next one I will require it.  I also have done remodeling work for him in the past, and am getting ready to remodel his master bath in fact. So I would like to try and give him the business in return if possible.

I guess he's not the most experienced with investors though from the sound of what you guys are saying if most flippers do not use Realtors/MLS then not sure how many are.

@Warbirds - Yeah the saying in Baltimore city is sort of "easy to buy, hard to sell". Guess I'm just hoping to find a good enough price/property and then use some of my finishing skills to get my finished product to stand above the others a little while still being competitively priced. I have not done any research on Carroll/Hartford; whats APG? If I don't do city I would be more inclined to do Montgomery County (where I live and an area I'm pretty familiar with) It's just so expensive with my limited investor resources I thought the city may be a better place to start. Though it may end up I need to find more/bigger pocketed investors before I can move forward.

Me and my wife have 2 separate vacations coming up in the next couple weeks and my daughters birthday and party craziness. Between this thread and my own rethinking numbers I have been getting a little discouraged so not sure how quickly things will be moving. My partner and I are going to meet up in a couple weeks and try and brainstorm/re-think our strategy and see what/if we can come up with.

fixer-upper

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Re: Making offer/cash closing time?
« Reply #38 on: April 02, 2014, 02:33:20 AM »
My first house was bought on a handshake.  We agreed on the price, and a couple weeks later, met at the title company.  If only other deals could be so easy.

I take a little different track than Realtors would like.  They LOVE to keep both parties separate, and in my experience, they're the cause of most problems/frustration.  Give me five minutes with a seller, and I can tell you if we can make a deal.  The same process with salesmen in the middle takes a week of useless paperwork.

I ask for the homeowner to be there to answer questions while I look at the place.  This not only gets me better answers to questions, but gives me a chance to form an opinion of the buyer.  Sometimes, I'll make a verbal offer straight to the owner.  If they seem too nervous of the process, letting their agent "sell them" on my offer seems to work better.  Once we have a verbal agreement, I'll let their agent put together a written offer so he can feel useful.

A side benefit of hammering out a verbal agreement is not needing to deal with the earnest money escrow when the buyer and seller aren't in the same ballpark.  Putting up $1000 just to make an offer is kind of absurd when you stop to think of it.

A cash deal can close in a week if you push hard enough.

arebelspy

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Re: Making offer/cash closing time?
« Reply #39 on: April 02, 2014, 07:32:15 AM »
A side benefit of hammering out a verbal agreement is not needing to deal with the earnest money escrow when the buyer and seller aren't in the same ballpark.  Putting up $1000 just to make an offer is kind of absurd when you stop to think of it.

I've never done that.  Offer always says "EMD to be deposited upon offer acceptance."

A cash deal can close in a week if you push hard enough.

I have done that.

Good thoughts overall f-u.  Thanks!
I am a former teacher who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and am now settled with three kids.
If you want to know more about me, this Business Insider profile tells the story pretty well.
I (rarely) blog at AdventuringAlong.com. Check out the Now page to see what I'm up to currently.