Marty,
What I do is put “Personal Line Of Credit” in this part. Do you have an addendum that explains that you go to a “pre-document signing” prior to closing. This addendum explains that you sign all the documents prior to the actual closing and then the closing is held in escrow until the deal is funded. Usually 48 to 72 hours later. This usually covers it because they think that you have all the money ready, it’s just a matter of getting the line of credits “final approval”. You know, all the T’s are crossed and the I’s are dotted. This usually covers the doubt.
Hello - Thanks first to all who make this a great site. I am in the process of doing my first flip. I have studied the techniques offered by Ron LeGrand’s cash flow course but now have a couple of potential deal stoppers.
Here in California, the residential purchase agreement realtors use to submit offers have a little clause under the financing portion that states buyers must, after blank days from offer acceptance, provide written verification of sufficient funds to close the transaction. If the verification is deemed unacceptable, the seller may cancel the agreement. No mention is made of the disposition of the deposit money. However, this seems to me to fairly preclude the simultaneous closing aspect of flipping that makes it so desirable. LeGrand’s office said to me about this matter, Yes, that has become a major problem. Does anyone have a suggestion as to how to beat this clause, other than just trying to flip FSBO’s using my own contract?
It has recently come to my awareness that the IRS doesn’t look kindly on flipping ie, buying properties with the intent to sell. The ramifications seem plenty and negative. Any information on being labeled a dealer would be greatly appreciated.
I’m trying to remain confident and optimistic about this type of creative approach to RE investing but I’m hearing a voice in my head say if it seems to good to be true, it probably is. I hope I don’t need another seminar…!
On the financing stuff, how about crossing off what you don’t like in the offer to purchase and put in wording that you do like? Does anyone else do this?
On the dealer status, I belive that you can find some info on this under the Legal stuff on CREonline or at www.legalwiz.com