I could use some help

Comments(1)

• 
  tanya121511th May, 2003

  Soon_2B_ Rich,
  
  Welcome to TCI!
  
  It's great that you have been studying the information before starting to pursue it. I'll do my best to answer your questions.
  
  How do I determine how much the house is worth after rehab and how do I determine how much repair must be made.
  
  You need to determine the FMV of the homes in the area. If a home is in need of say $10K in repairs, then it will probably appraise for below market value. Once you do the repairs, then you are bringing it up to market value and maybe more. The key is to find a motivated seller who will sell you the home at a significantly low price to make a profit.
  
  Will I need to have every potential house appraised?
  
  If you are acquiring a conventional loan or HML loan, then you will probably be required to have an appraisal done for the lender's.
  
  Do "purchase contracts" and "assignment of contract of sale" forms need to be printed on carbon papers?
  
  You don't need to have it printed on carbon paper. You should have two copies available to that you both have originals. I like to sign in blue ink, that way you know if it has been copied or not. And the seller cannot alter the document and claim that is what you signed.
  
  Attorneys? How do they come into play? What should I know and do?
  
  You should ALWAYS have a real estate attorney to at least review the documents you use to make sure they are state specific and fits your needs. You should find an attorney who is willing to think creatively and may also work with investors. Sometimes the attorney can also act as your closing agent, so you may want to consider that.
  
  How should I dress when meeting with home sellers and investors?
  
  REI is a business, so dress accordingly. If you are meeting with a homeowner with a million dollar property, then you should wear a suit and tie. But, if you are meeting a regular person trying to make ends meet, then some nice slacks and a polo should work fine. As long as you don't walk in with jeans that don't fit and a T-shirt, then you should be ok.
  
  How much earnest money deposit should I give to sellers and how much should I require from investors?
  
  NEVER give your deposit to a seller! Always have your money put in escrow. A title company or real estate attorney can do that for you. You can put as much into escrow as you want, from $10 to $1000. It all depends on what you agree to with the seller. If you tell them you're putting $10 into escrow and they don't say anything, then do it. They should've spoken up if they disagreed.
  
  How do I know when the investor closes the deal and how do I ensure they pay me my finders fee?
  
  ALWAYS have a contractual agreement created by an attorney and signed by both parties. In the agreement it should outline how you get paid, when you get paid, and what happens if they don't close. You should collect before assigning the contract. If not, then you should have a statement that says you get paid regardless of closing.
  
  When meeting with the buyer are there any key words that I should avoid? The investor?
  
  I can't really think of any key words to avoid. But, I thing I call tell you is to never lie to the seller. If they ask what you plan to do with it, then let them know that you are an investor and will make a profit from it.
  
  Also if you have any pointers, tips of any other words of wisdom then please pass them on to an eager learner.
  
  Always be honest. Speak in layman's term for the homeowner. Don't complicate things by asking them to put it into a land trust and then can't explain why. Silence is golden. Find out what the NEED and not want.
  
  I hope I answered your questions. Good luck. Don't give up! I heard of a newbie REI that took a year to do his first deal, but it was all worth it because he made over $100K from one deal.
  
  Tanya