Will:
Another alternative is to lock up this seller at the $65K option or purchase price.
Explain to her that you are NOT buying the home for your own use. Your are going to be selling the home to an owner user. Also she “may” have to sign some additional paperwork, etc. in order for her to be able to obtain the $65K CASH you have reach an agreement to.
If she is OK with all then then work with her to Sell the home directly to prospective buyers that you procurr by advertising the home for sale with OWNER FINANCING.
She will sell DIRECTLY to the buyers
She will agree to take back a purchase money mortgage & note secured by the home
She will then sell that Mortgage & Note with your assistance to a Note Funder (we would have interest) and at that time obtain the $65,000.00 cash she agreed to accept.
You will earn a profit on an immediate SALE of the home, and the resulting seller financed “paper” without the worries of having to close first, and then resell the home, deal with title seasoning of ownership issues, obtain financing for yourself or the prospective buyers, etc. and EARN your profit all at the same time…
The Wonderful UNITY of using “paper” with Real Estate allows you to make your profit on the sale of the PAPER Not the property here.
To your success,
Michael Morrongiello
Posted by Will (ATL) on October 30, 2001 at 14:36:15:
Here’s the breakdown…
Seller has house that she doesn’t want anymore. Willing to sell to me for $65K. House will appraise for $115 - $120K. House is in good shape and has been newly renovated. What I would like to do is put the house under contract then retail to buyer. Is there a problem with this? Other than capital gains.
Option 2: Flip to an investor?
Other recommendations or help would be greatly appreciated!
Plus, what’s the best way to word in the contract that I would like to have 60 days to find this buyer or would I do a straight option? Or put in the additional terms, conditions section that the contract is subject to or contingent on me getting partners approval, or financing, or something to buy some time. Help!!
Posted by Bob- Tx on October 31, 2001 at 09:45:11:
It appears from your post that you don’t have the wherewithal to close on the deal yourself. If your post is accurate this is a good deal and you need to get it under contract asap. I say write it up and/or assigns and put your closing date out 60 days. If you want to put in a contingency clause the subject to approval of financial partner is OK. I use an addendum to contract that gives me permission to put a sign up prior to close, gets me access to the house in sellers absence and a bunch of other stuff that puts me firmly in the drivers seat.
Now, once you get it signed up you must get that contract to the title company then aggressively market the property either to another investor or retail buyer. It is much easier to do wholesale flips than retail flips. A retail buyer will need lots of access to the house for inspections, appraisals, mother in law walk thru, etc. A good investor will need one walk through. IF your numbers are right you should be able to make a very nice wholesale flip fee out of this deal.