Help this newbie consummate his first flip deal, please! - Posted by Jack Z.

Posted by JohnK(CA) on April 09, 1999 at 23:09:46:

I believe the other issue would be the potential for a mechanics lien. If you had work done, but didn’t pay for it because the deal fell through, the property could be liened. Not likely, but if you are ever on the other end, be aware of it as a possibility.
Good luck

Help this newbie consummate his first flip deal, please! - Posted by Jack Z.

Posted by Jack Z. on April 08, 1999 at 16:50:38:

O ye who know,

I just got the terrific news that a seller accepted my purchase offer on a junker. I’m very confident I’ll be able to flip at a good spread, though it’s screaming to be pre-habbed, a la Joe Kaiser’s latest article. And though I have never been a big fan of manual labor, I can’t wait to dig into this one, because it will definitely make it much more marketable at a better price.

However, as the house is now under contract, and only under contract, the broker said I didn’t have the right to do much to it. He said only after close could I do it. Is that true? I thought I could clean it up, since it’s vacant, everything is included with the house (just really a big pile of rubbish), and it’ll only make the seller’s position stronger. What’s the deal? If I have no right, could I have my attorney draft a request letter to do what I want?

Please help. I’ve got it under a 30-day close agreement, and though I could come up with the money if I had to, I don’t want to. I want to flip it inside of the 30-day escrow. And I don’t want to advertise it yet, because it’s going to look about $10,000 nicer after one long day of rubbish removal and sprucing up. But, I don’t want to have to wait too long to start my efforts, giving me that much less time to sell.

And no, they would not have accepted a lease option. I thought of that.

Thank you!

Jack Z.

Re: Help this newbie consummate his first flip deal, please! - Posted by Cheryl Peters

Posted by Cheryl Peters on April 09, 1999 at 11:20:38:

I flip houses all the time get back up financing just in case(hard eqity) if possible. you can now assign your contract for whatever price you want, make sure your assigned deal closes 2-3 prior to the one with yourself and owner. Tell this realtor that you do alot of deals and need access into the properties prior to closing if they have a problem with this there are ALOT of realtors willing to work with you. Watch them start dancing no one wants to loose an investor who actually buys! If you have any questions call me @561.347.1215

Re: Help this newbie consummate his first flip deal, please! - Posted by Irwin

Posted by Irwin on April 09, 1999 at 07:35:38:

Tell the Realtor not to be so technical and that you want an addendum to the agreement along the lines suggested by Joe and Jim. He wants to close a sale on this dog and get paid doesn’t he? If the Realtor won’t cooperate, go to the seller yourself and explain what you want. There’s no reason for the seller to say “no” .
Be sure that the seller authorizes you to remove the rubbish. You can also state that you will be the only person in the house and you release him from any liability as the property owner. I would do this only if he mentions it first.
Keep it short and don’t get too legalistic or he’ll get leery and refuse. Heck, you might even try a phone call and get verbal authority. “Say Dave, would you have any problem with me going in and straightening up a little before we close?”

Re: Help this newbie consummate his first flip deal, please! - Posted by Paul Mc

Posted by Paul Mc on April 09, 1999 at 24:08:20:

Jack, liability IS the issue at hand here. Another way around it is to have the owner deed the house to you and have your attorney issue a quitclaim deed back to the seller. This way you own it and if you don’t pay the seller in 30 days, he records the quitclaim AND keeps your earnest money.
Good Luck!

One word about fast flips . . . - Posted by JoeKaiser

Posted by JoeKaiser on April 08, 1999 at 19:56:38:


If you just remember one thing, remember you need access to successfully flip properties.

Property access is just one form of access, but it’s an important one.


Opps - Posted by James-IN

Posted by James-IN on April 08, 1999 at 17:23:56:


I agree with John. You made a big mistake in the negotiation process before you submitted your purchase agreement. When you submitted your PA, you could have put in the addendum a clause that “allowed you the RIGHT to have access and use of the property to make it suitable for re-sale at buyers expense.” There are other clause that also need to be put into the PA, just giving you the idea. Especially, an escape clause. Always important to consult a good Real Estate Attorney.

Also, it sounds like your not dealing with a very motivated seller. Why would he care if you cleaned up his property for free? If you don’t sell the home in 30 days or come up with the money, he gets your ernest money and a clean house.


Re: Help this newbie consummate his first flip deal, please! - Posted by John(NH)

Posted by John(NH) on April 08, 1999 at 16:54:58:

You don’t have the right to do anything until you own it, unless expressly given authorization by the seller. While on one hand you might think he would be happy with you cleaning it up, on the other hand, the purchase is not contingent on it, so why would he care? Especially since if you hurt yourself on his property he is liable and can be sued…