flipping a listed property - Posted by Matt B


#1

Posted by Bob-Tx on February 24, 1999 at 20:17:21:

I have never had a problem with and/or addigns. Never!
If somebody asks I just explain that I have lots of friends who buy and sell houses and that sometimes I choose to pass a deal on to one of them because perhaps I just have too much on my plate at the time. NOTHING changes regarding the seller…if they like the contract there can be no argument against the assignment.


#2

flipping a listed property - Posted by Matt B

Posted by Matt B on February 24, 1999 at 13:06:13:

OK, I now have 3 solid accepted offers on properties that I found through my realtor. I would like to flip these properties, but a few things have occurred to me. 2 of the properties have real estate agency signs out front. What impact will this have on a potential customer of mine coming by to take a look at the property that I am trying to flip? The “standard” contract that the real estate agency uses contains a clause that states that I can’t assign the contract without the written consent of the seller. While this is not catastrophic, this makes the deal a bit more complicated. I did not want to add another clause to the contract voiding that clause since it may leesen the chance of it getting accepted. Is this something I need to be concerned about? I know that it means that I will have to do a simultaneous closing, but is there anything that I’m not thinking of?

I should be able to get my agent to help me show the interior of these properties to potential buyers. I guess what I would like to find out is what is the best way to handle a flip on a listed property? I have done title searches on them, and one has $1,929 in tax liens. Some of the “we buy houses” people ask if the property has any liens on it. How do I respond? If I tell them it does, I can then explain that they will be discharged at closing. If I tell them it doesn’t, since they will be discharged when I close with the seller, then it will be free of liens when I then close with my buyer, they could do a title search themselves and the same information would come up. I’m a bit fuzzy on the process that I need to do now. I would appreciate any and all advise on the matter.


#3

Re: flipping a listed property - Posted by Gary Huron

Posted by Gary Huron on February 24, 1999 at 21:49:34:

Matt,

As a REALTOR, I would have no problems with you doing a flip. My feelings are that as long as you and the seller agree to what is ever on the offer and it is carried out according to the written offer, who cares. As a REALTOR, I think that it is a great way to help sell property.

You are getting the original seller out from under the house so he/she can begin to get their life back and now making the house more marketable for the next guy.

You can flip higher price tag homes to increase your profit margin on properties that have troubled owners.

Good example:
Our office has a property listed with a seller that just died of a drug overdose. (That was a waste of a good person). Well constructed ranch that needs cleaning (interior/exterior) and paint. We could never get the seller to do the little things to make her house sell. (I did an open house and all my visitors just walked right back out due to the animal smell). Her family just wants the house sold and will do nothing to clean it up. I am working on having someone write up an offer that states they can have access to the property to clean and paint prior to closing and then end up flipping the property to another buyer who is looking for a home with that fresh look. The first buyer should be able to walk away with $5k - $10K for a weekend project. Just have to convince her family that this is a good way to sell the property without them being heavily involved and they will still get good price for the house.

Good luck and Ron LeGrand has a good book on flipping call “Fast Cash With Quick-Turn Real Estate”. You’ll love it.

Gary


#4

Re: flipping a listed property - Posted by Bob-Tx

Posted by Bob-Tx on February 24, 1999 at 13:46:45:

I don’t do much with listed properties but here are some thoughts. I would make the buyer on the contract be “Matt B and/or Assigns” then mark through and initial that clause in the contract that states no assignment. I doubt seriously that the seller will give a hoot.
Always be totally upfront with your buyer. Yes there is a small tax lien and it will be paid out of sellers proceeds at closing. Showing it can be problematic- I use an addendum on my contracts that among other things stipulates that the buyer (that’s you) shall have reasonable access to the property in the sellers absence for the purpose of showing to contractors and financial partners. Maybe you should check with your realtor re their willingness to get you in for showing to investors. Sounds like you are on top of it tho…congratulations.
Bob


#5

Re: flipping a listed property - Posted by Matt B

Posted by Matt B on February 24, 1999 at 15:12:03:

Thanks for the input. I had been told by many people that adding an “and/or assigns” to a contract is a red flag to most people. Only one of the people who told me this was a realtor, so that’s why I’m a bit apprehensive about adding that to the contract. I may give it a try on my next offer, however.

By the way, my awesome new realtor has no problem re-showing a property for me. I have explained to him that I may assign a contract or do a simultaneous closing if I choose to not do the rehab myself on a property. He has no problem with it, and has been extremely helpful and cooperative. (I know- freaky, isn’t it?)