Flipping properties,"The dealer" - Posted by Jenny

import · April 21, 2002, 11:43am

Posted by deanfly on April 21, 2002 at 16:17:28:

lisa I’d advise you to slow down a bit. This is you first deal, right.you better make sure or a solid weasal clause (contingincy) so youll be able to back out smoothly when things dont go as planned.You should work you way up to 3/4 mil $$$$ deals not just jump right in.Hope you dont have a hard landing when things startto fall. Best of Luck.

import · April 21, 2002, 11:43am

Flipping properties,“The dealer” - Posted by Jenny

Posted by Jenny on April 21, 2002 at 11:43:15:

I’ve been reading “Flipping properties” by Bronchick/ Dahlstrom. I’m interested in the dealer role. But as a "newbie, I’m anxious to start,but am frozen with fear. I have three questions:

Do I line up potential investors before actually finding the deals first? What is the best way to do that? There are no real estate investment clubs in my area.
I understand the purchase agreement drafted must give me the right to make the statement “And/ or assigns”, so I can assign my rights to the investor who will then directly close with the seller. I would then be paid a fee by the investor. But I’m truly wondering does it really go this smoothly? Is there really a market out there for me working as a middle man?
After selling a purchase contract to an investor, I assume that I walk away at that point. Does the investor then contact the seller, or is there any other closure that I need to do? Thankyou in advance for sharing any advice.

import · April 21, 2002, 12:48pm

Re: Flipping properties,“The dealer” - Posted by jeff

Posted by jeff on April 21, 2002 at 12:48:26:

if you assign your contract to another investor, get the seller to sign a release. you want to make sure that if somethign goes wrong in the deal, that you have been totally released from it.

make a database of other investors before you get any deals going. you dont wanna be pressed for time with a contract running down while your looking for other people to flip it to.

yuor investor will be bound by your contract to the seller at that point and will carry out any further negotations with the seller. although if the contracts have been signed, there probably wont be much negotiations to be done. this is why you get the best deal you can before you get it tied up in contract. if you tie it up at full price and assume the flipper will brnig it down when he deals with the seller, then yuor gonna be buynig that property on your own. the cnotract is set up before it is flipped, and if it isnt a good contract, you wont be flipping it.

theres more money to be made at double closings than your gonna get for asignment fees. close on the first part of the deal with the seler in escrow then resell it to your flipper a few hours later. that way yuor price is shielded from the flipper so he cant argue about the money you make on the deal. if he fails to purchase it from you later, then the first deal, being closed in escrow, is DEAD. yuoll have to keep marketing the house and try to get it flipped again before the purchase contract actually runs up or your stuck with it. this is a great example of why yuo get a list of investors before you get properties to flip. if one falls through and yuo have to get it gone fast, start calling names on your list, and hope one of them can take it off your hands quick. youll have to drop the price a little to get this done probably, but if you bought it right, you can still get a nice profit from it. at that point i recommend just assigning your contract since your not really gonna be making a killing on the property. it isnt worth your time doing all the closings. take the quick assignment fee, get release forms signed by everyone, and walk away with your profit.

import · April 21, 2002, 12:37pm

Re: Flipping properties,“The dealer” - Posted by Brent_IL

Posted by Brent_IL on April 21, 2002 at 12:37:34:

1 - If by dealer you mean that you want to do flips, I’d look for potential money-men and rehabbers, first. Understand that many will tell you to bring them a deal and then they will make a decision. At least you?ll know who to call.

2 - The market for your services depends on your ability to buy property at one price and assign it for profit while letting the bulk of the profit remain in the deal so the one who ultimately performs has an incentive to do so. Things rarely go smoothly with any deal, but they are not usually so messed up that you would avoid CRE investment.

3 - Open escrow as soon as you get a contract. Handle the assignment inside escrow.

import · April 21, 2002, 1:35pm

Re: Flipping properties,“The dealer” - Posted by Lisa

Posted by Lisa on April 21, 2002 at 13:35:30:

That’s basically what I am doing now. I am going to do a double escrow, having the seller pay closing costs. If you assign the contract than the other party knows what you paid, however if it is an investor and he/she knows that they can still make a profit and want the house I think they will still pay you for it. They will probably be calling you again to see if you found anything else.