Posted by aaron on July 06, 2002 at 16:32:34:
Thank you very much Juan for helping out:-) God Bless.
Aaron
Flipping conflict, PLEASE HELP!!! - Posted by Aaron
Posted by Aaron on July 06, 2002 at 11:34:20:
Hello Everyone! Happy Holidays!!
I’m about to put a house under contract for a great price compared to the market values of the homes in this particular area. Well, I know that if one has a contract on a home that you basically have control over it, correct?
Now, I want to flip this house. All I have to do is find a buyer, assign the contract or do a double closing, correct? Here’s where my dilema is. I want to put the market the house and end up selling it using an auction type technique. Making the starting price my buying price and then working my way up from there. Anything over my buy price is profit. How does this sound to all of you seasoned investors? Is this legal or illegal? I’m wondering because I’m probably doing what a real estate agent does, marketing the property and selling it right, but I guess the main thing is that I control the property with the contract right?
Any input would greatly greatly help, thank you all so much and God bless!!
Aaron
Re: Flipping conflict, PLEASE HELP!!! - Posted by Ray S(FL)
Posted by Ray S(FL) on July 06, 2002 at 17:25:15:
Aaron,
Just a couple of questions for you, logistically on your auction type flip. Is the home currently occupied? Are you going to auction it or are you going to get a Licensed Auctioneer? How much time are you allowing in your purchase contract to close the transaction, so that you can arrange for an auction and do a Sim. closing?
Sure does seem like a lot of effort when you can accomplish the same thing by just selling it with an ad in the paper. Why go through the whole auction thing?? What is that going to accomplish for you that you can’t do by simply running an ad. A house that is 40k below market should move very quickly if all your tring to make is 5-10k. What is it that the auction process is going to do for you after tying this house up and then flipping it?? To me, it seems like it is a little more effort than is required. It may even end up killing the deal if your seller found out that you were auctioning their house, or your buyer finds out you auctioned a house that you don’t own yet… I don’t know, I may be missing something… I would simply get it under contract NOW, and then get a contract to sell and then do a Simultaneous closing. Money spends the same and a whole lot less grief.
Good luck to you,
Ray S(FL)
www.ibuyhouses-polk.com
Re: Flipping conflict, PLEASE HELP!!! - Posted by Houserookie
Posted by Houserookie on July 06, 2002 at 11:41:05:
Aaron,
It is unlikely that you will sell for more without some other elements to motivate new buyers and a higher sale price. Go steal some tips and ideas from NoDiscount.com.
Austin
Re: Flipping conflict, PLEASE HELP!!! - Posted by Houserookie
Posted by Houserookie on July 06, 2002 at 19:17:50:
Have you ever tried the auction approach? People do auctions because they get 3-5 times more buyers than they could using conventional approach.
If you can get 3-5 times more buyers and offer reasons to motivate them, then you have a higher sale price and quicker sale.
Austin
Re: Flipping conflict, PLEASE HELP!!! - Posted by aaron
Posted by aaron on July 06, 2002 at 17:37:29:
Thank you Ray so very much for your input. It really does mean a great deal to me.
I would put it under contract with 30 days to close. Also with an extension of another 30 to 45days if needed.
I have disclosed everything with the seller already. The seller is allowing me to take this approach. The seller is extremely motivated to sell. I would also disclose to the Buyers that I am not the owner but that I have interest in the propert via the contract. (I really don’t know how I would phrase it though) I intend on disclosing everything so that there aren’t any surprises.
What I hope to accompish by using this method is basically three-fold. First, Sell the home quickly, thus helping the seller get out of the situation very fast. Second, Possibly make more profit than what I am anticipating, and Third, make this a learning experience for the future. And Yes, the owner still occupies the house right now.
The house is not a junker property by any means. It just needs cosmetic repairs. The area is incredible!!! Houses are listed one day and literally under contract the same or the next day. This way the buyers can also compete against eachother as far as the price is concerned.
Any further feedback would be greatly appreciated. Thanks and God Bless!!
Aaron
Re: Flipping conflict, PLEASE HELP!!! - Posted by Joe Eckburg
Posted by Joe Eckburg on July 06, 2002 at 22:42:43:
Could you give me the long-story-short on NoDiscount.com? I looked at their website tonight after seeing your reference to it on this post. I am building a spec house and want to be able to quickly sell it. Is NoDiscount.com worth it? How much do they charge?
Thank you for your time.
Joe Eckburg
Re: Flipping conflict, PLEASE HELP!!! - Posted by aaron
Posted by aaron on July 06, 2002 at 13:14:14:
Thank you very much for your advice Austin, I greatly appreciate it.
The house is being offered at just about $40,000.00 below market value. House doesn’t need much work at all, just some cosmetic work. What do you think as far as motivation? I’m serious, I am not being sarcastic.
Aaron
Re: Flipping conflict, PLEASE HELP!!! - Posted by Houserookie
Posted by Houserookie on July 07, 2002 at 24:35:56:
If you want the salespitch you better go read the site again. What I got out of it is that if you want to sell quickly for more, learn how to attract motivated buyers. Or learn things that get buyers motivated.
You can use the auction approach with No Discount or you can go without.
I think they’re worth it at $79…but not sure how much they charge now. I don’t know what the value will be to you since I can’t tell and don’t know what your plans are. Just as to some people this site is worth millions. To others it’s a scam.
Austin
Re: Flipping conflict, PLEASE HELP!!! - Posted by Houserookie
Posted by Houserookie on July 06, 2002 at 19:04:38:
If the property hasn’t sold, there can be only comparable sales and there is a no sale.
Right now you have a no sale because you have no buyer. Whatever YOUR buyer pays is your property fair market value. Finding motivated sellers is yoru first step, finding motivated buyers is a different story.
Austin
Re: Flipping conflict, PLEASE HELP!!! - Posted by Juan
Posted by Juan on July 06, 2002 at 13:28:39:
If you are a member of a REIA, try flipping it there.
Personally I would start marketing the property at a little higher than I would ultimately want to make. It’s harder to go up, but it’s up to you. Who knows you might be on to something, I am sure alot will depend on your market.
As for the legal reprecussions, I can’t help you there.
Juan
Re: Flipping conflict, PLEASE HELP!!! - Posted by aaron
Posted by aaron on July 07, 2002 at 11:02:45:
I definitely have a motivated, cooperating seller, and have motivated buyers in the wings. I guess my biggest concern isn’t finding the buyers, but actually how I would go about the whole thing.
Whoever wins the bidding obviously will get the house, but from there, how would I do everything. I would prefer not to do a double closing to avoid closing costs as well as avoid my name being on the title. How would I set up the assignment of the contract?
Thank you all!!