Posted by ray@lcorn on March 20, 2000 at 20:57:43:
What a great analogy… but I’m both a golfer and a dealmaker so you’re preaching to the choir here! Another point in common… good golfers never stop working on their game.
One thing though… there are fourteen clubs allowed in your bag… wouldn’t want you to go out underprepared!
Great post.
ray
First time Investor wants to know… - Posted by Tina
Posted by Tina on March 20, 2000 at 03:04:35:
Hello Everyone,
I need some advice. I am a first time investor and I just want to know, upon fliiping property when the seller agrees to let you assign their property under contract, what are you offering to the seller in return? And also if I don’t have much money like (earnest money for backup in the contract) how would I apply the contract without getting myself burned in the end if the flipping to another investor doesn’t follow through. Who decides how many days I have just to flip the property to another investor? I have at least one to two more questions. I have read some advice stories on getting the property under contract as little as possible. How would I determine the percentage of what I would put the property under? Example : I found a house for sale priced at $83,500, now if the seller agrees to place his/her property under contract with me would this house be placed under at least 50% to 60% or what have you? Would I receive $70,000 back at closing. (don’t laugh at my math I am retheorically thinking offwise in my math figuration). I just need an idea. I apologize to everyone for asking so many questions but I just want to make sure that I know what I am doing and remember, I am new to this so go a little easy on me all you pros’ out there. Thank you all for your time.
Tina
Re: Real Estate is like the game of golf… - Posted by NJDave
Posted by NJDave on March 20, 2000 at 18:44:41:
Bassman has a point. Posted Questions should be accompanied by sufficient data to help readers form an educated response.
And he is right when he implies that too many real estate investor wannabees are blinded by stories of get rich quick strategies… with little understanding as to the real effort involved.
I tell my new-to-investing clients:
Real Estate investing/speculating is like the game of golf. You need specialized equipment to play. Each strategy learned that’s taught in a course, book or seminar is like a single golfclub. Each club is meant to perform a specific task. There are 13 clubs in a well equipped golf bag. The experienced Golfer knows what club to use in each situation. He doesn’t rely on one club to play the whole round, he selects the proper club for the task at hand. When the shot calls for a 300 yard drive, he doesn’t use a sand wedge. He knows what each club is designed to do in an variety of situations.
Too many newbies learn one strategy and think it will work in every scenario that they encounter. The newbie needs to know several/many techniques/strategies that will help him ‘play’ the game.
Learning should never cease. Keep adding clubs to your bag. The more you know, the better you’ll play.
The pros have Caddies.
Re: First time Investor wants to know… - Posted by Bassman
Posted by Bassman on March 20, 2000 at 10:16:26:
First, get your act together !
Stop listening to all the dream stories about how poelpe got a house for 50% and think that every house you find is going to be able to be acquired for that kind of price. Period.
You must first answer some basic questions , like I wish everyone new would before they post a question, because it would save a LOT of time and get your question answered quickly.
What are the NUMBERS ??? You threw out $83,500.00 ??? Is that the asking price, FMV, above FMV ??? Know what that price is.
What is the house worth ? 85K, 60k , 20k 100k, know how much its worth so you can determine , with repairs, if its a condidate for flipping to a rehabber. If there is no room for an investor you flip to to make money, forget it. And you certainly dont think your going to flip a pretty house to an invesotr and make a big profit if you cant get a good price do you ?
What kind of repairs are needed? Is this a junker, pretty house, needs paint , needs 20k in repirs, Ifit doesnt need a lot of repairs, the likely hood of getting a big discount ar NIL.
What is the motivation of the seller? High , none , divorce, gotta move, has plenty of time? If the seller has no reason to sell to you at a discount , you will get nowhere.
The basic questions most new investors ask have been answered so amy times on this newsgroup, if you would only be patient, and do a search first, you would save yourself a lot of aggravation. Of course, this is not only to you Tina, but to any one interested in listening. Dont just listen to some cool stories that make it sound like all you have to do is ask any old seller to discount 50% and they will beg you to take all there profit. Every deal is unoque in itself and must be approached as such.
Maybe what worked on one deal may not work on another, but you must give accurate information to us to be able to get more than a " buy a course" answer. The people on this site give freely, but you must , must must, give us all the information , to be able to get a straight answer. That is why so many posts get ignored, they dont give any thing to go on.
I hope this helps.Its just my opinion.
Scott Cooper
P.S. Buying a good course wouldn’t hurt either, i have many, they are worth the money spent to save you some time and loss of deals.
First… - Posted by Carmen_FL
Posted by Carmen_FL on March 20, 2000 at 08:33:33:
Read the articles on this site. They will answer many of your questions, and they are free! Especially read the Quick Flip Primers (parts I and II) - you will get a very good idea of what a flip is and how to do one.
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.
Anthony Henry
Just tryin to retire in 3-5yrs 
Re: First time Investor wants to know… - Posted by Stephen A
Posted by Stephen A on March 20, 2000 at 03:45:48:
I have to agree with Antwon on this Tina. The amount of questions you are asking and the simple answers that can answer them indicate your lack of knowledge on the subject. I believe that the purchase of a course will enhance your ability dramatically and in no time at all, you will be answering questions rather than asking them. Invest in a course to prevent yourself from getting really burned right from the gitgo!
Stevie A
A Course Is In Order - Posted by Antwon
Posted by Antwon on March 20, 2000 at 03:35:27:
Tina:
Please don’t jump into this without educating yourself. Buy a Course! There are many good ones on this site. Check them out and go for it! You really need to buy one before investing!
Antwon