Posted by Glenn-PA on November 20, 1999 at 16:31:03:
I’m a part-timer so understand my experience is limited… So far I’ve bought and sold a fourplex, and just sold my third residential rehab. I’ve only used a contingency clause on one occasion so far. I don’t like the partner clause since I don’t have a partner. My contingency clause is both simple and broad - “Subject to inspection and repair estimates satisfactory to the buyer.” Only used it once but nobody complained.
I’m a Newbie in search of input - Posted by Marcus
Posted by Marcus on November 20, 1999 at 15:40:37:
Hi!
My name is Marcus and I’ve been reading articles on this web site for about a year now, and I finally feel I’m ready to make deals.
I’m cleaning up my credit report and haven’t yet seen bankers about getting a loan. I’m just getting contracts together with the “subject to approval of partner” clause.
I think I want to begin my REI by flipping property in the Chicago area, and plan to build up my “buyers” database. I understand that flipping is good for “no money down” deals because I’m still working on getting loans.
I have a sales (previous profession) so persistence is a given.
What may be a better plan for a beginner? Does anyone have expierence with the Chicago area? What would you have done better if you began again?
Much Appreciated!
Marcus
Get in there and mix it up. - Posted by Joe Kaiser
Posted by Joe Kaiser on November 20, 1999 at 20:47:48:
Marcus,
My partner and I signed up two deals before noon today, each one completely different than the other but each having a similar beginning . . . a seller with a problem gave us a call.
Don’t pin yourself down to a certain technique or strategy or plan. That’s not the way things actually work. Opportunities come from every direction and what doesn’t work is trying to fit them to your plan.
Get your name out there in the hands of motivated sellers, and when they contact you, sit down and figure out how best to both solve their problem and make a few bucks yourself.
My two deals today . . .
Owner in foreclosure, needs $6k to bring current. I put up the funds and received a half interest in the property. He maintains it and makes payments from here on out, and if he defaults, he loses his half interest. Nice, clean and tidy.
Other deal, owner with $1m property needed $30k to stop foreclosure. We gave him the funds and agreed to develop the property, sell off the parcels and receive a share of the profits. Again, a solution that works.
You’ll note, there’s no “subject to” contracts here, or contingency clauses or any of that other stuff. Instead, you’ll find our solutions to their particular problems, solutions that the sellers found satisfactory for their present needs and solutions that guarantee us substantial profits down the road.
Could you have done these deals? I suspect so. What about the $30k? The seller actually wanted $100k, but rather than do that, we put up the $30k and to get a toe hold and will now hook the seller up with a hard money lender to get him the balance of his funds (as well as get our money back to us). End result . . . we’re in like Flinn without anything into the project and have a six figure payday locked up.
I’m not here to tell you how smart I am. What I am trying to say is your role as a real estate investor is actually one of a problem solver. Solve enough problems and you’ll be able to afford both premium gas and a car that requires same, or just about anything else for that matter.
Joe
A Call To Action - Posted by MN~Chicago
Posted by MN~Chicago on November 20, 1999 at 17:24:34:
I would take whatever level of learning you
have developed and get involved with the
“process” of doing.
Your learning level will increase more
than you can imagine.
It’s okay to make mistakes in the process,
that’s how you improve. The point is to
do. There is no better plan for a beginner
than the one you haven’t executed, yet.
Don’t wait, and good luck.
Think OPM (Other People’s Money) - Posted by Bill K. (AZ)
Posted by Bill K. (AZ) on November 20, 1999 at 16:53:49:
Marcus,
Since you’ve been reading this site for a year, you know that very few people advocate purchasing properties using loans that are taken out in their own name. Using someone else’s money is the basic premise behind this site. If you choose to use your credit for all of your purchases, you’ll certainly run of money before you are able to amass many properties.
Once you figure out your market, and successfully flip properties WITHOUT using your own money/credit, then you stand a good chance of never having to borrow money against your name. It will totally be your choice.
What would I do differently if I could begin again? I’d spend more time finding exactly the kinds of OPM deals I wrote about above, and that this site advocates. I foolishly utilized my own funds to get my first few deals, and ran out of money quickly. It was a good way to get some properties under my belt, but I didn’t develop the skills for obtaining more without my own funds. I’m concentrating more on OPM strategies now, and the results look promising for me. I know they work just by reading about other’s successes.
Good luck, and I hope this helps!
Bill K. (AZ)