Anyone ever get their BUTTS KICKED?........when doing a flip.... - Posted by Cosmos Canada

Posted by Mark-NC on March 29, 2000 at 08:46:37:

Since I am selling my Note at close it is to my best advantage to set the terms for the best buy rate on the Note. The rate and terms may be different for each buyer and depending on their credit and down payment situation the rates can range any where from 10.50 to 13%. Generally there are no ballons. My Selling point is to get them in the home and then they can easily refinance at a later time, Most of the note buyers report the payments to the credit agency so it will be easy to refi if they pay on time.


Anyone ever get their BUTTS KICKED?..when doing a flip… - Posted by Cosmos Canada

Posted by Cosmos Canada on March 27, 2000 at 17:51:45:

This is a serious question…

Has anyone doing a flip or a L/O ever get any bad heat from a buyer or seller after they find out that you’re making a buck?

My experience to date is only good…

I almost did some BUTT KICKing - Posted by Mark-GA

Posted by Mark-GA on March 28, 2000 at 08:39:43:

I had a house that we let a ?middleman? put under contract because he offered us $1k earnest money and convinced us he would buy it if he couldn?t find a buyer. Needless to say, his contract expired.

We subsequently found a retail buyer and had under contract, ready to close.

Meanwhile, the first guy is still marketing the house. He finds a buyer and represents that he has the house under contract. This buyer wants to paint the house prior the closing in order to get a better appraisal. The ?false? buyer paints the house (our house, mind you) an awful aqua blue.

Our buyer goes ballistic.

Everybody is ready to sue everybody else.

In the end, our buyer can?t get the financing and we sell it to the ?false? buyer. Lucky for the middleman.

Re: Anyone ever get their BUTTS KICKED?..when doing a flip… - Posted by Mark-NC

Posted by Mark-NC on March 27, 2000 at 19:35:59:

When I first started doing flips (retail). I would put a contract on a home and hopefully find a buyer that I could re-sell with owner financing.

So I put a contract on one place and the guy thought it was a sure thing. So he moved all his stuff out and got set up in another place. Well GUESS WHAT? I couldn’t sell it!!! It was like 60 days later and he said “are you ready to go to close”? I said sorry, I don’t have a buyer and I won’t be buying your home. Boy Did he get Mad.

From that day forth Is when I decided to find buyers first, Qualify them, then show them some homes. If they liked it, the deal was ready to go.

Or I will use open options to purchase. That means I have an option to purchase but not exclusive.I usually only give them a dollar to make it binding. The seller likes this because they could still sell it to someone else. I tell the seller who ever sells the property first wins.
I don’t have to worry about my buyer going around me because the seller has no idea how to set up an owner financed note deal.
I am up front now with all my offers. There is even verbage in my addendums to the seller and the buyer to let them know whats going on with out disclosing the numbers between the seller and my buyer. I tell them I am an investor, and they both know I am making money but not how much.I also tell them, what would be my motivation to do this if I didn’t make money? And if they confront me with how much I will make, I always answer “just enough to make the deal work”. There are no surprises to anyone, this has worked best for me.


I almost got my butt kicked - but I managed to pull it off !!! - Posted by JohnG

Posted by JohnG on March 27, 2000 at 18:58:26:

This was back in the early days.

I had no money so I had to do a simultaneous close on this house. I bought for 89,000 and resold for 103,000.
I even had to borrow the 3,000 deposit I was so broke.

So, I arranged for a 60 day closing and I put an ad in the paper. The only problem was the owner was still living in the house. I told him I needed to show to prospective “tenants” and I told the “prospective tenants” who were actually my buyers that the person in the house was a “tenant from Hell”. I said he is a powder keg ready to blow - please don’t talk to him when I walk you through the house - he could go off and I wouldn’t be able to get him to move out at the end of the month. It was hilarious.

Only now looking back at it does it seem absolutely incredible that I pulled it off - but I had no choice. I had no money and I was selling to my buyer and pocketing a tidy little profit. I should have won an Oscar for that performance !!!

I have! - Posted by SCook85

Posted by SCook85 on March 27, 2000 at 18:21:21:

I experienced a butt kicking one time.

The seller got pi**ed because I was making $6k off of his house. He calmed down real fast. I told him that you are getting exactly what you asked for the home, no less. You knew that I was buying it to make money. He was OK then, but did get a little hot for a moment.


Re: Anyone ever get their BUTTS KICKED?..when doing a flip… - Posted by Tyrone Rock

Posted by Tyrone Rock on March 28, 2000 at 06:41:43:

i am also about to start flipping properties.Could you tell me more about these open purchase options

Re: Anyone ever get their BUTTS KICKED?..when doing a flip… - Posted by Stephanus

Posted by Stephanus on March 27, 2000 at 19:58:40:

Mark are you a mortgage broker?

Open options. - Posted by Mark-NC

Posted by Mark-NC on March 28, 2000 at 07:55:40:

One of the reasons I started using open options is the fact that I am in a hot real estate market and I would say that 97% of the properties for sale are realtor listed and the few that were not listed did not want to deal with realtors. Also the fact that very few sellers if any would let me put an exclusive option on their property. But with an open option there is no threat to them and 99% of them go for it because they have nothing to loose.

So what I do when I aproch a seller I tell them I am an investor and I buy homes for cash then I re-sell them to individualls using owner financing. I also tell them I am very interested in their home but I am not going to buy it unless I have a buyer that I can sell it too.

So I would like to market their home but in order for me to do that I need to put an option on the home. This way I can leagally do this. I also tell them that unlike a realtor that can tie up your property for months this is an open option, meaning they can sell it at any time to any of their prospective buyers and the option would become null and void. So the theroy is who ever sells it first wins. They have absolutly nothing to loose and everything to gain.

Then what I do Is put a sign in the yard next to theirs that says owner financing available for this home with my phone number on it. When people call I tell them exactly what is going on and if they need help getting in a home I will buy it and re-sell it to them with owner financing.

I have had some sellers that liked this so much they take their sign down and I end up fielding all the calls on the home and I ended up assigning one deal instead of using notes because it was an A credit buyer with their own financing.

Now if the numbers are not good on the deal I will still do an option just to put a sign in the yard. Its free advertising( except for the $1.00 option money). This way when they call and you can’t fit in that deal you can get their info and place them in another.


PS. I sent you an open option contract.

Re: Anyone ever get their BUTTS KICKED?..when doing a flip… - Posted by Mark-NC

Posted by Mark-NC on March 27, 2000 at 20:42:52:

No, just a Note Broker.

Re: Open options. - Posted by Wilton

Posted by Wilton on March 31, 2000 at 07:29:53:

Great Idea…I also would like a copy of the open option contract. Many thanks for sharing. Wilton

Cool Stuff : Open options. - Posted by Stephanus

Posted by Stephanus on March 29, 2000 at 19:56:11:

Hi Mark,

Can you email me at I tried to email you earlier and might not got delivered. thanks.

Re: Open options. - Posted by jay spencer

Posted by jay spencer on March 28, 2000 at 20:27:25:

Mark, please email me a open option contract.

thanks !!1

Re: Open options. - Posted by Michelle

Posted by Michelle on March 28, 2000 at 13:21:55:

The “owner financed” is only a decoy is it? (So that the owner does’nt talk to your buyer)

Most of the time do you find people who simply have good credit. Or do you get creative? How…

Thanks in advance,

Re: Anyone ever get their BUTTS KICKED?..when doing a flip… - Posted by Cosmos Canada

Posted by Cosmos Canada on March 28, 2000 at 12:28:11:

Thanks for the reply guys…(&girls)


Good luck $$$$$$$$


Re: Open options. - Posted by Mark-NC

Posted by Mark-NC on March 28, 2000 at 14:13:03:

The owner financing is what draws the response to the property. I do owner finance, I just sell the financing at closing to cash me out. Most of the buyers that respond to owner financing are the ones that need it for some reason or another.
Buyers that can go down to the local bank and get the best rates are not my target buyers. They could easily go around me to the seller because they have the ability to get whatever financing they need. On the other hand Buyers that qualify for my note deals won’t go around me because I am their source of financing them for that property.


Re: Open options. OK if I butt in with a question? - Posted by OzarkMark

Posted by OzarkMark on March 28, 2000 at 14:26:22:

Hi Mark, so are you optioning the property below appraised value? Then selling at appraisal value? Then selling the note at a discount? If so, you must be getting the sellers to discount their price quite a bit up front when you get the option to sell, right? I must be missing something…seems like the sellers would have to give a big discount in order for you to sell the note at a discount and still make enough money to make it worthwhile. Could you please fill me in? NewbieMark

Re: Open options. OK if I butt in with a question? - Posted by Mark-NC

Posted by Mark-NC on March 28, 2000 at 15:36:07:

Usually when I look at a home I have a good Idea of what the value is because I know the area well. So with this in mind I have a close estimate of what the property is really worth when I look at it.If I think it is priced below market value to start with it is a definate advantage.

When I talk to a seller I will ask them what their bottom dollar price would be for a cash offer. I let them tell me and usually this is what I option it for. But that doesn’t mean that’s whatI am going to pay for it even though I optioned it for that amount. What I mean by that is, say I have a buyer that comes in and the numbers look good. Now I have a deal ready to put together. I will go back to the seller and say listen I have a buyer that I can put in your home and can close in less than 3 weeks the only problem is I can’t make it work with the agreed price, would you consider an offer of xxxx? And as long as its not to far off the agreed price and not insulting they will usually take it.Many of the times this will work depending on their motivation and the fact that you really have an actual deal. If the seller says yes, we agree to tear up the option contract and write up a offer to purchase contract.

Then if the property was listed on the low side you get an appraisal for what the property is actually worth. And this is how you create your room to make money. Now, your not going to make a killing on most of your deals but it isn’t hard to make between $ $10000 per deal.

As far as taking big discounts on the Notes If they are set up right you should get about 95 cents on the dollar for them on an average.

Now if you go into the property and it is overpriced to start with it is usually a waste of time, unless you want to put a sign in their yard for exposure for other deals. The thing is, you never know what will happen I have even had some people pay the discount on the Note just to get the home they want.

You just have to make things happen and work the numbers out or move to the next deal.


Re: Open options - Posted by leonor

Posted by leonor on March 29, 2000 at 07:01:14:

I also think these are really good techniques. Could you please also email me an open option contract. I have mainly been dealing with a realtor but if I find a fsbo, I would like to have your contract. How do you find your sellers, by the way? Are they very hard to find?

Thanks Mark! Great technique…even I could do it! (nt) - Posted by OzarkMark

Posted by OzarkMark on March 29, 2000 at 06:15:37: