FSBO is the way to go. Don't wait to put an ad in the paper. Do it now, even if you don't have a house to sell. Find a mortgage broker that will finance your buyers, no matter what their situation may be. They are out there, and willing.
I placed an ad in the thrifty nickel: For Sale By Owner, 3/1 in xxxx county, Will help with financing.
Call XXX-XXX-XXXX., I'll answer.
Got a call today from a guy from out of state moving to TN 3/1/04. I now have a buyer before I have the house. And I have my eye on three that would fit the bill for him perfectly. I found out he really didn't need help with financing, and that has a nice down payment already.
These ads will work for you.
Drive through the neighborhood and see how other houses are being marketed. In some neighborhoods almost all the houses are listed in the MLS, in other neighborhoods FSBO works weel. In my area you can list on the MLS for a flat fee of $150. You keep a lock box on the house and have showing instructions in the realtor comments. If you list on the MLS realize that you will have to give a standard fee to the buyer's agent (3% here).
15k if you FSBO. If you plan goes bad and you can't get rid of it without listing it does that take your profit down to $10k, 5K? If it takes you 6 months to finally bite the bullet and list it, how much will it cost you to hold it that long? Are you down to like 5k in profit?
Unless everything goes you way without any hic ups you will be making somewhere between 5-10k profit and you are doing all the work yourself, are you doing realestate or are you just really being a contractor and being hired by yourself?
I would think hard about it, if you run the chance of only making that on it you are just being paid for being a contractor, you could do that without having to buy a house.
I am a relatively new investor and have rehabbed 4 homes and sold all FSBO. I have owner financed each one also. It is very difficult to find qualified buyers in the $40,000 to 75,000 range here. By owner financing the deal, we get top dollar for our properties. We have a great bank that loaned us purchase and rehab money and deferred payments until we had a buyer. With the buyers downpayment we pay the accrued interest and then start making payments. Our buyers payments are always at least $200 over our payments and we pay taxes and insurance. We prescreen our buyers by making them talk to a broker we work with. The broker will tell us whether or not he can get the buyers a loan in one year. We have had 2 buyers complete this process and 2 buyers currently paying us. If you can wait a year on the money this is a great way to sell for top dollar. We also avoid short term cap gains.
The bank is a small local bank in East Tennessee called Commercial Bank. Rehabbers should always choose a small local bank with around 5-10 branches. Try to develop a relationship with one person there. My banker practically calls me to see if I have any projects going and to see if I need money. Avoid big banks. There are too many levels of management.
Your method is simplified and direct. Your utilization of other people skills is certainly to be commended. I think in your price range it is the perfect answer and at all times you are in complete control of transaction.
My early SOP was very similar to yours although I did work through a large Bank. Bank of America which is in most instance the kiss of death. But I found a bank which had as its Manager a man with clear vision capable of realizing the place of a bank in the capitalistic society and as such was a paragon of virtue to small business men like myself. If it had not been for him and his support I would have had to rely on hard money lenders who would have reduced my share in transaction to a pittance.
If you move from that price range into the higher amounts you may find that you will not be able to continue on this most excellent of arrangements. Accordingly may I suggest you spread your wings a bit and examine other banks and financial entities. I make the assumption that you would like to increase your dollar retention amounts.
My deals have been small because they fit my comfort level. The last home
I sold was for $87,500. I am becoming more comfortable with larger numbers now, and I feel confident my bank will allow me to do larger deals. I will never use a bank such as Bank of America. They would certainly at some point screw something up and I would have to make 20 phone calls to fix it. If my bank ever turns me down for a loan, I will drive across the street to their competition and apply for the loan there. I know personally investors with 1 million dollar lines of credit with 2-3 different banks. They do a volume of business to support it. Until I get to a larger volume my bank has assured me they will look at any deal I bring. They will give me 80% of the after fix up value. If I find a house that needs cosmetics for 70K and it will be worth 100K when done, My bank gives me 70K to buy it, keeps about 2K for closing, and either escrows a check for 8K or cuts me a check on the spot for 8K as they did last time. No fear that I would take off to Hawaii on the 8K. How many big banks would do that. My bank trusts me and calls me by name, not number. Yes I have very good credit and a stable income other than real estate. But any newbie should look at small local banks to get started, then if they outgrow one, move on.
FSBO is the way to go. Don't wait to put an ad in the paper. Do it now, even if you don't have a house to sell. Find a mortgage broker that will finance your buyers, no matter what their situation may be. They are out there, and willing.
I placed an ad in the thrifty nickel: For Sale By Owner, 3/1 in xxxx county, Will help with financing.
Call XXX-XXX-XXXX., I'll answer.
Got a call today from a guy from out of state moving to TN 3/1/04. I now have a buyer before I have the house. And I have my eye on three that would fit the bill for him perfectly. I found out he really didn't need help with financing, and that has a nice down payment already.
These ads will work for you.
Drive through the neighborhood and see how other houses are being marketed. In some neighborhoods almost all the houses are listed in the MLS, in other neighborhoods FSBO works weel. In my area you can list on the MLS for a flat fee of $150. You keep a lock box on the house and have showing instructions in the realtor comments. If you list on the MLS realize that you will have to give a standard fee to the buyer's agent (3% here).
Brenda
15k if you FSBO. If you plan goes bad and you can't get rid of it without listing it does that take your profit down to $10k, 5K? If it takes you 6 months to finally bite the bullet and list it, how much will it cost you to hold it that long? Are you down to like 5k in profit?
Unless everything goes you way without any hic ups you will be making somewhere between 5-10k profit and you are doing all the work yourself, are you doing realestate or are you just really being a contractor and being hired by yourself?
I would think hard about it, if you run the chance of only making that on it you are just being paid for being a contractor, you could do that without having to buy a house.
I am a relatively new investor and have rehabbed 4 homes and sold all FSBO. I have owner financed each one also. It is very difficult to find qualified buyers in the $40,000 to 75,000 range here. By owner financing the deal, we get top dollar for our properties. We have a great bank that loaned us purchase and rehab money and deferred payments until we had a buyer. With the buyers downpayment we pay the accrued interest and then start making payments. Our buyers payments are always at least $200 over our payments and we pay taxes and insurance. We prescreen our buyers by making them talk to a broker we work with. The broker will tell us whether or not he can get the buyers a loan in one year. We have had 2 buyers complete this process and 2 buyers currently paying us. If you can wait a year on the money this is a great way to sell for top dollar. We also avoid short term cap gains.
Kleach-
What is the name of your bank?
The bank is a small local bank in East Tennessee called Commercial Bank. Rehabbers should always choose a small local bank with around 5-10 branches. Try to develop a relationship with one person there. My banker practically calls me to see if I have any projects going and to see if I need money. Avoid big banks. There are too many levels of management.
Kleech, have no idea how to pronounce.
Your method is simplified and direct. Your utilization of other people skills is certainly to be commended. I think in your price range it is the perfect answer and at all times you are in complete control of transaction.
My early SOP was very similar to yours although I did work through a large Bank. Bank of America which is in most instance the kiss of death. But I found a bank which had as its Manager a man with clear vision capable of realizing the place of a bank in the capitalistic society and as such was a paragon of virtue to small business men like myself. If it had not been for him and his support I would have had to rely on hard money lenders who would have reduced my share in transaction to a pittance.
If you move from that price range into the higher amounts you may find that you will not be able to continue on this most excellent of arrangements. Accordingly may I suggest you spread your wings a bit and examine other banks and financial entities. I make the assumption that you would like to increase your dollar retention amounts.
My very best Lucius
Lufos,
My deals have been small because they fit my comfort level. The last home
I sold was for $87,500. I am becoming more comfortable with larger numbers now, and I feel confident my bank will allow me to do larger deals. I will never use a bank such as Bank of America. They would certainly at some point screw something up and I would have to make 20 phone calls to fix it. If my bank ever turns me down for a loan, I will drive across the street to their competition and apply for the loan there. I know personally investors with 1 million dollar lines of credit with 2-3 different banks. They do a volume of business to support it. Until I get to a larger volume my bank has assured me they will look at any deal I bring. They will give me 80% of the after fix up value. If I find a house that needs cosmetics for 70K and it will be worth 100K when done, My bank gives me 70K to buy it, keeps about 2K for closing, and either escrows a check for 8K or cuts me a check on the spot for 8K as they did last time. No fear that I would take off to Hawaii on the 8K. How many big banks would do that. My bank trusts me and calls me by name, not number. Yes I have very good credit and a stable income other than real estate. But any newbie should look at small local banks to get started, then if they outgrow one, move on.