Re: First time Investor wants to know… - Posted by Anthony Henry
Posted by Anthony Henry on March 20, 2000 at 08:24:00:
Well Tina I dont if this will help but here goes. By the way Im just a newbie like yourself well maybe just a little bit more knowledgable…lol.
Here goes, in NYC here this is what Ive been doing. First things first. YOU MUST BEGIN TO SOLIDIFY YOUR BUYERS LIST. This is soooo important. In the last three months all I did was searched for Investors and approaced them and found out what there specs were(whats the highest all cash deal they will go for, what terms will they consider etc.) Once you have atleast three or more willing to back you, you are on a roll. This by the way can also include realtors by the way.
NEXT - It seems you are locating sellers if so. REMEMBER- ANYTHING GOES - NEGOTIATION IS THE KEY. I learned this somewhere back and it has been reinforced over the last couple of months. Offer what you will as long as you and the seller agree thats all that matters. Remember your contract states “reasonable consideration” you might find this funny but here in NYC I know an investor who because he deals strictly with cash will offer at times 100 on contract, just to tie the property up.
AS FOR APPLYING THE CONTRACT - If Im understanding you correct it sounds like you asking about assignment. If so again that is not too hard the key is to get the seller to understand what you are doing. Its only a clause like soooo many in a standard contract. Just say tothe seller that this is how you do business, and that this will allow the the chance to sell the property if needs be to one of your many investor contacts. The appearance of someone with these contacts can be so critical. Again cultivate cultivate these contacts.
PREVENTING YOUR SELF FROM GETTING BURNED
Well this is all about making sure you have a well laid out exit strategy. Meaning make sure before you even sign a contract you have your buyer lined up with his cash.
Also you might want to try several clauses that offer you an escape. Clause - “This offer is contingent upon the agreement of my partner - John Doe” within X days. or something to the effect." (I guess you also should have your lawyer handy…lol.). Also there are so many other escape clause. Im sure the pros will be more thatn happy to list some if you ask them kindly.
BY THE WAY AS AN OFF NOTE GET YOUR SELF AS MENTOR. This too is so important. There are times and mind you I just started when I just wanted to quit. Looking at 42 properties with nothing to show…lol. You need someone who can keep you focused on the path not the dream.
AS FOR YOUR MATH.
it seems a little skewed but that might be because you have not thought the process out clearly. Remember a good flip begins and end with your seller. (By this I mean, remember you wont know what to offer your buyer if you dont know exactly what you are offering to the seller. Whats the spread involved, whats your fee. Is it flat or a percentage of the sale price set between you and the seller which you then wrap into the price to your buyer.) This is where knowing and understanding what your investor/buyer specs are will help clear the muddy waters. As for what you are putting down as percentage FORGET IT. If you have to put down too much more than your earnest, if any. THEN THIS DEAL MIGHT HAVE TO WORK IN A COMPLETELY DIFFERENT MANNER. Point is keep your cost as low as possible maximize your leverage, spread your profit margin to its limit within reason.
WELL TINA THIS IS ALL THE HELP THIS NEWBIE CAN OFFER RIGHT NOW I HOPE IT HELPED.
I know what it feels like to not have a clue about how to structure an offer, you will learn really fast though lol.
AS FOR READING AND COURSES>
Unless you have the money to invest in your education right away forget it. DO YOU UNDERSTAND what a resource you have handy to you right her at CREON. dont underestimate it darlin. LIVE FRUGALLY and LBYM. Get yourself to the library. Robert Allen, Nothing down for the 90’s. will be a nice start. Plus if you can get all of his other works. Get the Millionaire Next Door, not by Allen. Remember expand your mind as you learn to LBYM(Live below your means) your creativity will increase. Its not just about real estate its about LIFE.
AGAIN HOPE THIS HELPED.
Just tryin to retire in 3-5yrs