flipping - Posted by jeff

Posted by NC on February 21, 2007 at 10:55:11:

Michael,

What are you doing to find your motivated sellers?

Just curious if you’re marketing with signs and the such, or sending out letters, etc…

Thanks.

NC

flipping - Posted by jeff

Posted by jeff on February 20, 2007 at 13:45:31:

how do i flip a property so i do not get stuck with it? how do i know when i put a property under contract that my buyers will buy the contract(property)?

Re: flipping - Posted by NC

Posted by NC on February 21, 2007 at 08:52:45:

I don’t think you will REALLY know if your buyer will close. I mean, if your buyer is an investor, you could ask them for past deals they have done, and do title searches to verify…thereby establishing credibility.

You could ask for proof of funds if they are cash investors, or a letter of approval for convential, retail buyers.

You could also align a hard money lender so YOU can close, in case your buyer flakes at last minute. You would need to make sure you are buying within the lender’s criteria, though. (i.e. 65% X ARV)

I would recommend you have a liquidated damages clause in your contract, in case you have to back out for some reason. However, you don’t want to be backing out of contracts…not good for business.

NC

Re: flipping - Posted by Michael

Posted by Michael on February 20, 2007 at 15:08:41:

I always structure my flips non-recourse so that once I flip it, it cannot come back on me.

Once you get your assignment fee from the person you flip it to, you should have no concern as to whether or not that individual will purchase the property.

Re: flipping - Posted by Natalie-VA

Posted by Natalie-VA on February 21, 2007 at 10:01:46:

Michael,

I’ve never done a non-recourse assignment. I’m curious to know if the seller is aware that you won’t stay involved after you sell your contract. How would that conversation typically go?

–Natalie

Re: flipping - Posted by Michael

Posted by Michael on February 21, 2007 at 10:16:51:

The non-recourse language is in whatever contract I present to the seller. I do not bring it up in my conversations with the seller. It is not my duty to advise them of the ramifications and legal effect of each clause in the contract. Indeed, if you are not an attorney, you cannot give them legal advice.

I have never been asked about it, because I deal with motivated sellers. They just don’t ask about it. But if I was asked about it, I would simply reply that that is standard language we use for this type of contract (which it is in the contract I use).

Re: flipping - Posted by Natalie-VA

Posted by Natalie-VA on February 21, 2007 at 18:07:28:

Do you do these sorts of deals with people in foreclosure? I realize it’s not your duty to protect the seller, but I’ve run into some deals where the person in foreclosure thought they had their house sold, and in the end it goes to auction because an investor didn’t follow through. I’ve wondered if if was someone trying to assign a contract unsuccessfully. If that’s the case, it doesn’t seem quite right IMO.

–Natalie