what to tell a seller when flipping ... - Posted by Jorge

Posted by Jorge on March 17, 2003 at 19:53:48:

Thanks everybody for all of your advice. I now know what to say. I will keep you posted on how my first “flip” goes!

Jorge

what to tell a seller when flipping … - Posted by Jorge

Posted by Jorge on March 17, 2003 at 14:11:40:

So I am looking to flip a few properties and I have one that I think would be a good deal. Comps are at about 108k(according to a appraiser friend) and its being sold for 67k. About 5k or so is needed to fix up. Maybe 8k.(according to a contractor friend of mine.)
I have an investor that says he is willing to help me through my first wholesale flip deal. Including writing up the offer to the seller and the assignment contract between us. And paying me $2500 for my efforts.
Oh yea the house is 1800sf and 4 bed 2 baths.
SO my question is what do I tell the seller.? Do I just say I am buying it for myself? or do I tell him upfront that I will sell my interest to an investor?

Thanks for all the info,

Jorge

Be honest with the sellers - Posted by Jim

Posted by Jim on March 17, 2003 at 15:36:04:

Jorge,
Your best bet is to be honest with the sellers.
Mr./Mrs. Seller, now that we have agreed on a price and closing time, I will begin the process to get this deal closed.
I may have to come in here with some partners, inspectors, contractors, possible tenants and buyers before we close.
I will repsect your privacy, and give you notice before we show the property.
You just need to be aware that we will be doing this so that we can insure the closing will take place in a timely manner for you.
We are not yet 100% positive on what type of funding we will use to close this particular deal with you, because we will use either a lender who specializes in investor loans, (Hard money to you.), or, we bring in other investors to close the deal.
With some luck we will be using another local investor on this deal, which will help us get you closed sooner, rather than later.
Should we decide to do this, we very well may assign our agreement with you, to the other investor.
This will in no way effect you, the price we set here is what you will get at closing, no matter who actually closes, you will get paid.
I’ll also be placing a sign in the front yard, because it is in all parties best interest if we attract potential buyers now.
We will write on the sign, “By appointment only”, so you will not have to worry about people stopping by asking to see the house. Should someone slip thru that, just refer them to the number on the sign and we will take care of them.

Are there any questions before I leave?
As I said, I will call you with any showings we need to do, and with a final closing date and time, as well as directions to the closing office.

Simple as pie.
This way, when you assign the deal, no problem.
If your investor backs out and you need to use private funds to close, you are set there as well, or perhaps flip to someone else.

The sellers are now prepared for what ever action you take, because you were honest with them.

Be sure to get a key when you sign too, so that showings can be done after a phone call to the sellers.

Good luck,
Jim FL

Re: what to tell a seller when flipping … - Posted by Steve (atl)

Posted by Steve (atl) on March 17, 2003 at 14:29:40:

Let it be know that you are in this for a profit. I mean, are you in it for any other reason? Either use an option or have an assignable purchase contract. THere are several options that you have. Use one that you are more comfortable with.

Re: what to tell a seller when flipping … - Posted by Jorge

Posted by Jorge on March 17, 2003 at 14:39:32:

Steve,

Thank you for your response but I don’t think you understood my question. I have an investor friend that is going to buy my interst when I put a contract on this property. As far as what paperwork to use I will use probably an assignable purchase contract with "and/ or assigns on it. But what my question was.
Do I tell the seller of the property that I WILL assign my interest to another investor? or DO I just let him find out when my investor that I am assigning it to finishes the purchase with the seller?.

THanks again,

Jorge

Check out Kaiser’s best darn doc… - Posted by Kristine-CA

Posted by Kristine-CA on March 17, 2003 at 16:49:23:

Jorge: check out Joe Kaiser’s “best darn document.” My first few flips, I made the mistake of just assigning my contract or doing double closes without notification to the seller. Problem was that even though I closed as promised and the money was there as promised, when the seller signs a deed to someone else, it makes them wonder–needlessly–if I had put that the possiblilty of assigning exists in the contract. With double closes, even though sellers are deeding the property to me, the money is coming to escrow from my buyers. Escrow agents cannot disclose details–such as “your buyer has a buyer and that’s where the money is coming from.” But it would be best if the sellers had no reason to think you are “pulling” anything. You are not, of course. But many sellers are suspicious of investors, middle-men, brokers, etc., and the more upfront we can be, the less likely they are to jump to conclusions (especially incorrect ones.)

Better to way upfront about it. Have them sign a doc as part of the purchase agreement that makes them aware of the various possibilities.

Sincerely, Kristine

Re: what to tell a seller when flipping … - Posted by IB (NJ)

Posted by IB (NJ) on March 17, 2003 at 15:11:04:

You can also introduce your Investor friend as your “partner” and say something like “I’m handing this over to my partner since he deals with these ypes of properties more than I do. But if you ever have any questions, give me a call.” Leaving the lines of communication open builds a lot of trust.

Re: what to tell a seller when flipping … - Posted by Mikelle_SC

Posted by Mikelle_SC on March 17, 2003 at 14:53:16:

Here’s my two cents: First get your contract signed as if you were going to purchase the property yourself. Then afterwards let him know that you’ve decided to assign the contract - use whatever excuse you like. This way the owner won’t feel like he could get a better deal. He’s thinking, if you’re getting more for his property maybe he can too. He may waiver on his selling price. Just my two cents. Good luck.