Investors
Lets say for the sake of aurgument that I found a property that was worth $100k and I could purchase it for $60k, I put a contract on it and lock it up. I have an assignment clause and a 30 day weasle clause letting me walk if I don't find a buyer. Who would I contact that would be interested in purchasing this wholesale property? And how much would I be able to negotiate from the buyer for the assignment? I need as much detail on this type of transaction as possible, as this is my only avenue for RE investing for now. Any help would be greatly appreciated. Thanks
Well, assuming that it doesn't need any repairs, I'd say tha's a sweet deal. To find buyers, since you're just beginning, you have two easy www.options.One is to put an ad in your local paper or this website, or both, and wait for the buyers to call. second option is to visit you're local Real estate Investors Association and let them know about it.
If it does need some rehab, then you need to be sure that you've left your buyer a 20% profit at the very least, which in this case would be $20,000. This means that if they bought the contract from you for say $65,000, they'd need to put in a maximum of $15,000 in rehab costs, for them to make any sought of meaningful profit if they are selling, or equity,if they are holding.
My typical Contract assignment fee is usually $5,000. And that should not be a problem for this particular deal. If you can get more, depending on whaether or not it does need repairs, do it.
You can search this website for numerous books, and articles on assignment too!
"The fear of God is the beginning of all Wisdom"
Many Blessings. 8-)
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Without knowing what is owed on the assumable mortgage makes it kind of a shot in the dark but I'll assume that the equity is there to do it.
Here is my shot at it:
66.5k
Scott
need more info........kenmax
Is the "FHA Assumable" loan a "NO QUALIFYING" FHA assumable, like the ones which used to exist before the late 80's?
If it is, then why wouldn't you simply assume it, instead of taking it over "subject to?"
Yes, believe it or not, there are still some of these deals out there.
Start from the beginning:
1. Purchase Price
2. Acquisition Cost
3. Rehab Cost
4. Carrying Cost x 6 mos
5. Selling Cost
If you start from the beginning and work from there, you can see the whole picture. The problem with people getting into the business is they fail to account for 'actual' rehab cost, 'actual' carrying cost. I have had houses fall out of escrow 3 times and take a year to sell. If you figure at least 6 mos, you are buying yourself a cheap insurance policy. If it sells before then, great! People getting into the business also fail to acount for 'actual' sales cost which could be as high as 3%-4% for items such as:
-FHA non-allowables
-Termite
-Escrow/Attorney Fees
-Title Insurance
-Property Taxes
-Home-owners insurance
-Home Warranty
-Repairs called out by home-inspector
One thing to cut down cost is to find an escrow company/attorney who will give you a discount for 'volume' business. You can do the same with your title company. You also want to purchase you properties with a 'binder' policy so you only pay for the Title Insurance you use when you sell. There are many things you can do to cut your cost. Maybe some of the Guru's reading this can share some other idea's in cutting cost ? Go ahead, give it a shot!
Best Riches,
Jeff Adam
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Scott:
Pretty close! You may be right on as I have not run the numbers. What did you give for the following cost:
-Eviction cost to get the tenants out?
-Sales cost by owner with a new buyer getting an FHA loan??
Best Riches,
Jeff Adam
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