Chris Goff, 2-Time Best Selling Author will teach you what real estate strategies you can use to make additional money... to building a huge local real estate investing business without using your own money or credit.
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Usually no because the wholesaler has a contract to pay the seller in one lump sum. Otherwise, the seller would have to agree with terms with the wholesaler. You could always wait until the contract expires with the wholesaler, then contact the owner.
Do you think condos & co-ops are good candidates for this type deal? I know condo & co-op boards want a say in who is buying into their buildings. To avoid the hassle and getting entangled in that paperwork & scrutiny, would you say getting the contract then assigning it would be the best way to deal with it?
Hi Chris! This is great! In this type of deal, who would be responsible for maintenance costs such as property taxes, water, etc in the case that your contract with the seller extends past the 1st year?
What I am skeptical of is the idea of being able to find a buyer. You premise these startegies on finding a run down place that maybe hasnt been selling so you can make a profit. So why do you think that selling the same property unchanged at a now higher price is going to be feasible?
With all do respect, that thinking is exactly why some people make $$ and some can't. This comment exchange is a prime example of why this absolutely works. You don't know what you don't know. Knowledge is true currency. Period.
This would be a typical fear for most people just getting started. I was told in the very beginning of my career that the deal/numbers with the seller is the most important. Otherwise, you won't have to worry about buyers. 500 deals later, I'm glad I was told this.
Hey Daniel, thanks for the question and hopefully I can shed some light on this. When purchasing properties at a wholesale price, the most important thing to do before making an offer is to calculate the numbers. When calculating numbers, you have to add in the buyers potential profit, otherwise, no one will buy it. Investors want to buy properties that they can profit from for sure. Usually... these properties aren't advertised to sell in the beginning so no one knows what you're making if you do a double close. Otherwise, you assign contracts and the reason Investors buy them from you is to save time. Their profit is much bigger than yours. Most Investors buy properties through either agents or wholesalers. So you are much needed for sure. Hope this helps :) Remember, if they don't buy it from you, they won't get the deal and will have to buy another property. Which in most cases, will be sold by again... an agent (which receives a commission) or a wholesaler which receives a fee.
Investors are actually my smallest part of my buyers today but when I was wholesaling, they are we're my buyers. I don't advertise for buyers until I have a property to sell. Then I mostly advertise online using website, PPC, craigslist, etc.
I wouldn't have them look up your credit because you're not buying the home, the new buyer is. If they insist, move on to another deal. Building the relationship upfront will be the key. No seller has ever asked me for my credit.
If it's cash (one lump sum) or terms, this is spelled out in our contract, this in itself explains to the owner how you intend to purchase. You don't need proof of funds unless you are typically working with a Realtor. I do have some other trainings that might help clarify the contracts part or you can watch the contract video in: https://www.myreipro.com/
Chris, Thank you kindly for the prompt reply to my two others questions this evening, sir. Much appreciated! :-) In your opinion, is California a good state to be doing lease option deals, in 2017+? You mentioned Texas and Maryland having somewhat different laws, and I'm currently in northern California and considering possibly relocating to Arizona, etc., but perhaps not if these strategies will work better (and more profitably) in areas with a $600k.+ mean home prices vs. 1/2 - 1/4 of that. ;-) And do you think I can get 5% down as a lease option consistently, on $400.- $800k.+ average homes? Or would I do better (in the long run) at $10k. - $15k. down, doing more LO deals?? ( I also used to be a general contractor, but don't want to deal with 'fixers,' at present!)
Chris, Well since you put it out there, the mean home price in Sonoma county (where I am, currently) is back at $600k., Napa is $800k. and Marin is $1 million. (Slightly higher than the West side SFO bay area average, I think?) So you would ask 1 - 2% down ($80.- $160k., vs. say 2.5- 5%) on an $800k. home then, still going for a 12, 18, or 24 month buyer contract, and 2- 3 years, with the seller? I was thinking a 'sliding scale' at slightly less than the 'competition,' might prove to be the winning strategy. And if you're still 'mentoring...' I could be doing deals in 2- 4 weeks, with minimal input + your software.
Lease Options work great everywhere where there are sellers that can't sell and buyers that can't buy. The more expensive the market... such as California... the more profits they'll be. Prices on homes don't matter as long as the numbers work. A qualified buyer for a $800K home in California would need to put down $50K - $160K down generally speaking. What about the people that don't have the credit but have the money? This is where you come in.
One other thing that came to mind that I don't see the answer explained here in the QnAs yet... if the hypothetical down payment for a LO contract is $10k. on a $200k. home that's rentable for $2k./month and the seller agrees to say $1700. in monthly revenue, is that then predicated on the approx. difference between the 'going rate' for the home if rented (again $2k./mo., to use your example) for a 12 month 'buyer' contract? (i.e. $3,600. at $300. x 12 months in exchange for your 'property managing,' the home, while their 'incentive' payment then gets rounded- down two grand before the buyer moves- in, for your basic property management, for the duration of the lease option contract, with the buyer.)
Good Evening Chris! Quick question, does the potential buyer on lease option in terms will improve their credit score by paying monthly mortgage to the investor? If not how would you convince the potential buyer that in one year they would be able to buy full price by going to the bank? Thanks in advance!
Chris Goff Thank you so much sir! Yes I was thinking that potential buyer will improve their credit score the same as people improve theirs when they are paying monthly mortgage or car payment for example. Anyways thanks for answering my question quick. Looking forward to join REIPRO!
Not that we always charge full price but it would be good to have access to a local mortgage broker that can work with the buyer during the term. Sometimes it's just about a debt to income or self employment. Either way, we are just giving them the time they need to get qualified. You will know this upfront by doing a credit check, etc. If they won't be in a position to qualify in a year, don't put them in house. There are a lot of shady investors out there that as long as the buyer has the down payment, their in the house. You should always do the right thing because you'll always make more money. Hope this helps!
I am currently in the process of finishing up my pre license classes to become a realtor. I find myself paying more attention to your videos than the course material needed for passing the realtor test. My question to you or anyone else that can include some input is should I stay clear of becoming a realtor if I want to use the strategies discussed in this video, or will becoming a realtor be a useful tool to use along with these strategies? Any help is greatly appreciated!
Having your license isn't a bad thing and can gain you access to specific things on the MLS. Let me just say that I don't have a license nor have I ever. A licensed agent and an investor are really 2 different people. One more thing to add is that if you have your license, you will have to follow all the rules, policies and procedures the state requires you to follow. We don't as investors because we're not licensed. The most ideal situation is that if you're working with a partner or spouse that one of you have it and the other doesn't. Hope this helps!
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