Posted by Lib Cassin on March 26, 2000 at 07:04:24:
Ed:
Great post and thank you, you have ansered the exact question that I was struggling with on how to structure the language on the flip into the contract, the heirs or assigns, its brilliant
First time Investor wants to know… - Posted by Tina
Posted by Tina on March 20, 2000 at 03:10:25:
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: First time Investor wants to know… - Posted by Ed Copp (OH)
Posted by Ed Copp (OH) on March 20, 2000 at 16:30:04:
Hi Tina,
First lets look at what is happenig when I enter into a contract with a potential seller of a property. I give the seller my offer to buy the property that he has for sale. If he accepts my offer we then have a contract. If he does not accept my offer then there is no contract. If the seller makes any changes in my offer and sends it back to me for my approval, then this would be a counter offer (no contract yet) and if I accept his counter offer then this proposal becomes a contract. Now to have a contract we must have an offer from one party to the other AND we must have acceptance. O.K. now when we have a seller under contract that would mean that we have come to an agreement in writing, and hopefully we have covered all the little contingincies in the contract.
You asked what is the seller offered? That is up to you and shoulod be covered in the original offer. The same is true of any details including financing, occupancy and so on. I do not ever use the word flip, because this is likely to be misunderstood. When I prepare an offer that I want (or might want to “flip”) I usually make the offer “subject to financing” in some way. In other words if I cannot find the financing that I need then the deal is off. The financing might include me finding another investor to put up some cash, but this might not be stated just exactly that way. About the “flip” part I usually cover that part in the section that says who to make the deed to: I usually state to ME, or my heirs or assigns. This means I might take title, or I might die and in that case I would want my heirs to to have this property…or…my assigns (that would cover anybody else that I might assign this deal to…THE FLIP).
You asked what does the seller get? It does not necessarily need to be money. In a lot of cases the seller will be thrilled to death to just know the house is SOLD. He might be several payments behind or something… Your promise to buy is the contract and that is really a very valuable consideration, that you can sell(flip) if structured properly. How much of a profit can you make? Who knows? You are the person who has to figure this out. You have to have all the numbers figured out in your first offer, so when the seller accepts, and you have a deal then you will be able to figure out on paper how much you will make.
I hope this information will help you out…ED
Re: First time Investor wants to know… - Posted by Lib Cassin
Posted by Lib Cassin on March 26, 2000 at 07:05:10:
Ed:
Great post and thank you, you have answered the exact question that I was struggling with on how to structure the language on the flip into the contract, the heirs or assigns, its brilliant