REAL DEAL: My Biggest Assignment Fee in 17 Years of Wholesaling Houses
What are REAL DEALS by the MOB? Real deals are actual real estate transactions being conducted by Tracy Caywood. You can visit the posts to get updates as they progress. They won’t all have a happy ending, but you can see for the first time what REALLY happens in the business. This is real shit right here.
This could be my favorite post that I ever make to the REAL DEAL category of the MOB website.
It's kinda hard to get me excited these days about a wholesale deal. I mean after seeing 600 of them, they all sorta run together. But this one stands out in a category by itself.
Keep reading and you'll understand why.....
Where This Lead Came From: My Website (Organic Search) for "We Buy Houses Jacksonville
Why This Person Was Selling: Hoarding and deferred maintenance
After Repaired Value: $1.1 Million
Seller's Asking Price: $450,000
It was February 26, 2015.
So there I was, thinking it was an ordinary day in Starbucks in Freakville Beach. I was drinking my Iced Grande Salted Caramel Mocha. It's my favorite! I wish I could have one every day, but I can't take the calories. Well I can, but my waist can't. Makes me wanna scream.
Anyway, it was around 8:30 am. The lead came in through Zoho CRM. I happened to see it in my email inbox, and I saw a truly motivated seller who was willing to sell the house for 50% of market value. And this wasn't just any house. It was an oceanfront house in Ponte Vedra Beach, FL.
I jumped off my stool ( I was sitting at the barista bar that day) and called the seller. He willingly told me enough information to know that I needed to get this deal under contract today. There was urgency in his voice. Here was the situation:
He bought the house several years ago, and he lived there with his wife until they got divorced. Only the wife lives there now. There has never been any maintenance done to the property, and he wants to get her a new place to live. She's a hoarder. The house is full of "stuff" and you can hardly walk in there. He told me that he was well aware that the house was wroth over 1 million dollars, and he knew there was money to be made for an investor. He knew that he could never sell this house to the "public".
He was in town for only 1 day, which was that day, and said if I wanted to see it, I had to come TODAY between 2 and 3 pm. I quickly agreed and confirmed that I would be there.
As I was listening to him talk, I quickly checked out the comps using my hot comparable sales link from my CRM, and confirmed that the house was worth at least $950,000. This is a hot one!
I printed a contract, gave it to Dan, told him where to be at 2 pm, and told him to give the seller his asking price. and NOT to leave without it.
The contract was processed, and it was ready to start marketing it the next day. Dan and I are training our 21 year old son, who served 4 years in the U.S. Army, right out of high school. He's learning to work with the buyers first, since it's a bit less challenging than working with sellers. He's in charge of contacting people on our V.I.P. Buyers list, and letting them know when we have a new house for sale that meets their criteria.
It didn't take too many calls to know that this was going to go fast. People were making offers without even going to look at it in person (like just from our photos).
Within 24 hours, Derek had the house sold for $550,000 with a $2500 Non Refundable Binder Deposit. He wanted an inspection contingency, but we don't typically allow that. So he agreed to put up the $2500 until he could get his (private) lender to look at the house. So yeah, that's a photo of Derek when he first got the contract signed with his buyer and the Non refundable EMD collected.
I got the text message from Dan. It was the signed contract from the seller (and his wife) for $450,000.00! VICTORY.
Here's a Few Photos of the House and the Inside
The weekend passed, with buyers chomping at the bit about this house. Monday rolled around, and Derek met the buyer and the buyer's (private) lender at the house.
They went through the house with a fine tooth comb.
They were there about 30 minutes.
Later that afternoon, Derek got the call from the buyer stating that the lender didn't agree to loan on this house. He thought that the repair cost was too high.
The deal went dead. The buyer forfeited his earnest money deposit. (We explained to him that he would lose his EMD if we tied the house up over the weekend). Derek started making calls to buyers again, letting them know that the contract fell through and it was available.
Within 48 hours we had a new contract signed from a cash buyer. One that we do business with all the time.
Because of the nature of this type of deal, and the "luxury home" category, he was unsure what the final value of the house would bring, so he didn't want to get in over his head on the purchase price. I felt pretty certain about the value of this house, so I wasn't budging off of $550,000 purchase price. Then, something magical happened.....
Together, between me and Dan and the buyer, we came up with some very creative terms that everyone was happy with.
The purchase price with the buyer is $525,000.00. There are a few stipulations, however.
If the final sales price of the house is greater than $950,000 then the buyer will pay us an additional $30,000 within 48 hours after they close with their retail buyer.
If the final sales price of the house is greater than $1,000,000, then the Buyer will pay us an additional $50,000 within 48 hours after they close with their retail buyer. USUALLY, we have a general rule of thumb if we're making an assignment fee of $15,000 or more, that we'll do a double closing (2 HUDS). But I'm overcoming that "fear". I'm realizing a few things:
- Sellers don't stalk the buyers side of the HUD (and this is where the assignment fee is shown).
- If the seller is motivated, and you've created a win win situation, then it doesn't matter how much money you make.
Of course, there are going to be those special circumstances where you just feel like you don't want either the buyer or seller knowing how much money you're making on the deal. In that case, do the double. For this closing, I made the decision to put the $75,000 assignment fee on the HUD and do 1 closing. I had no worries whatsoever that either the buyer or the seller would have a problem with this.
I was right.
The transaction closed without a hitch and we brought home a check for $75,000.00 There's also a possibility that we might have $30,000 - $50,000 additional check coming in the next few months. I feel pretty certain that the house will sell for at LEAST $950,000.00, especially with the plans that this buyer has for this property. Do you know why this is the best story of my entire career? Because this is the biggest check/assignment fee that we've ever made on a house. I'm pretty excited about it.
Deals like this don't come along every day, but since this I've added a new marketing campaign / targeting to my bag of tricks.
I know everyone likes Proof, so Here's the copy of the check and the HUD showing the matching assignment fee. YIPEE!!
REAL DEAL: Tales from the Crypt
Date of Initial Contact by the Seller: September 5, 2013
Where This Lead Came From: Probate Mailing
What is the Seller's Situation: The screenshot says it ALL
Action Plan: It was about 9:00 pm when I got this lead, so I sent the seller an email letting him know I would call him at 9 am. in the morning. And that's exactly what I did. I called him at Sept 6, 2013 at 9:00 am Sharp. He immediately went into the story. So here's the rundown. His brother died in the bathtub (with water in it) and was in the house for a month (in the water) before anyone found him. His brother was also a hoarder. We agreed to meet at the house at 10:30 am on Saturday, Sept 7, 2013 to take a look. He said that he found a DOUBLE FILTER mask that will keep the smell from gagging us, so he'll bring us one! I can't wait! This is an awesome story for REAL DEALS whether I end up getting the deal or not. I'm going to take photos and see if I get an ORBS!!!
Saturday, Set 7 update (after seeing the house): I arrived at the house at 10:30 am and the seller was sitting in the front yard waiting for me. He warned me that the smell started at the threshold of the garage. So I avoided that area for as long as I could. If a breeze blew, I could catch a stench of death. it was pretty damn creepy. He walked me around the perimeter of the house, pointing out every detail of repair that the house needed. Then he offered me the mask, and we went inside. Remarkably, the mask didn't allow any smell of death to seep in. He gave me a tip that if I started to smell anything, to pinch the top of the mask where my nose is, and that would keep the smell out. He kept referring everything inside as "biohazard". To sum up the repairs, the house needs one of everything. Not only has the smell of death seeped into the carpet, walls, and counter-tops, but there's also deferred maintenance. There's a slab leak, it needs a new roof, needs a new kitchen....just imagine a full rehab on a 1750 SF house.
He revealed that there's a HELOC loan on the house for $135,000.00 and that him and his siblings prefer to sell the house to an investor to make a "coin", and move on from this problem. They have no interest in rehabbing the house themselves. I told him that I would get him an offer in writing today, and send it to him by email.
Offer Made to the Seller: After researching the comps in detail, I've determined that the ARV on this house is about $205,000.00. The rehab is pretty extensive. due to the biohazard material, and to rid the house of any odor of decomposition, it needs one of everything. This smell has seeped into the walls and anything porous. So I have the estimated repairs at $40,000.00. My offer to the seller right now is $95,000.00. I made the offer knowing that he owes $135k on a HELOC loan. In this event, it would be a short sale. He made some comments that maybe some other investors would see things differently than I did and would be able to get repairs done for less than me. So he's definitely shopping this around. And with all of the newbs coming into the business right now, there's a good chance that I'll get outbid on this one because of the location (Jax Beach).
I'm going to follow up with the seller on this, but odds aren't looking in my favor. He wants to make some money on this house when he sells it, which I cant see him doing - no matter which exit strategy he takes. The probate isn't quite complete yet, so he's not in a "hurry" to make a decision. Time and circumstances will change everything with this seller. FOLLOW Up, Follow Up, Follow up. An investor is his ONLY option, in my opinion.
Response from Seller: I received a reply to my offer. It's no deal. They don't all work out, even in situations like this. I don't blame the seller for not wanting to do a short sale. There's really nothing in it for him. See photo of email below:
Lesson from the Real Deal: Every seller and every transaction is a unique experience. Embrace each one.
Property M.O.B.: Your Source for Wholesale Real Estate Strategy & Coaching
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REAL DEAL: How to Wholesale a Meth Lab
Here's a photo of the Meth Lab Beauty: (not so bad looking on the outside). I never did get a chance to see the inside of this property, so I have no idea how it looks on the inside. I don't think the buyer saw the inside, either! LOL
Where This Lead Came From: My Website! I Love website leads. They don't cost me anything, and they're usually HIGHLY qualified. Some of my highest profit deals are made from the website. This
I wanted to share this story with you, not because it's the biggest of checks, but because it's the first time I've ever flipped a meth lab. It was quite interesting to learn the story of the meth lab, and more interesting to learn that I could sell it. So hell yeah to METH LABS!! Bring on another one.
Here's the check from the closing:
REAL DEAL: Down to the Very Last Minute
Date of Initial Contact by the Seller: July 6, 2013
Where This Lead Came From:
This seller came from a QUIT CLAIM DEED Postcard Mailing.
What was the Seller’s Situation:
His mother signed over a quit claim deed to him, as she was tired of being a landlord. Him and his sister (they've agreed to split the money) aren't interested in keeping the house. The house is currently rented for $350 by a tenant who has been there for 3 years. The tenant pays the rent on time and keeps reasonable care of the house. THe house hasn't been updated in quite some time, but there is nothing that needs immediate attention. The seller is a REALTOR. (Not even kidding)
The house is located in a SOMEWHAT ghetto neighborhood, but it's not in one of those zip codes that make me cringe. The area does stink a bit since there is a Glidden paint factory nearby. Kinda smells like fart. I think the neighborhood residents are used to the smell.
Initial Offer: July 6, 2013
I didn’t visit the property in person. Instead, I looked on Google Maps to see what the house looked like. I called him on the phone and told him that I would be in the range of $6,000 - $10,000.00 to buy the house for cash. He agreed to $6,000 right away, and I sent him the contract via HelloSign.
Accepted Offer: July 9, 2013
It took him a few days, but he finally signed the contract on July 9, 2013.
Marketing the Property:
We ran into some issues right out of the gate. The seller didn't want the tenants"bothered" by showings, which was one of the reasons he sold it for quick cash instead of listing the property on the MLS himself. So it was a bit challenging showing the house with a tenant in there and keeping the wish of the seller. We did run some ads on Craigslist and put out some bandit signs, but no bites. So Dan listed the house on eBay - on a 7 day auction. He received numerous inquiries, 1200 Page views and 120+ watchers. But in the end, not a single bid.
At this point, I'm a little surprised because this is literally a smoking hot deal. Our asking price was $9,900 for a house that was rented for $350!! How can you go wrong there? Uhh I don't know. It's nearing our closing date, and Dan or I just can't let this one go. It's just too good of a deal.
I made an offer to a MOBSTER who I knew was watching the eBay auction, and he agreed to go 50/50 on the deal with us. Our plan was to collect the rent until the house sells for $12k - $15k. (that's what the 2/1 houses are going for in this area). We were to buy the house in a Land Trust, with each of our corps a 50% partner. Then, something came up with him, and he told me he was unable to move forward with the deal.
Renegotiations: August 14, 2013 (The Power of Leverage)
I called the seller and let him know that we weren't going to be able to close on the house at the current terms, but that I had another offer that might work for him. I presented an owner financing deal with the following terms: $6,000 Purchase Price (same as before). I will give him $2,000 as a Down payment, and the balance to be paid over the next 18 months. My monthly payment will be $222.18 (I offered ZERO interest). I told him that we could close whenever he's ready. The rents, of course, will cover the payment to the seller, and leave us with some positive cash flow. After 18 months, the entire rents will be positive cash flow and we'll own the house free and clear.
The seller didn't give me any objections. He told me to write a new contract and email it to him. He would "present it" (he's a Realtor, remember) to his sister, and let her know what's going on. He said that they were using the cash to pay for some pre-paid funeral expenses for the mom.
New Contract sent to seller: August 15, 2013 at 8:32 a.m.
I'm waiting on a response or a signature via HelloSign.
Response from Seller: August 15, 2013 3:23 PM EST (Via Email) He responded with:
Hey Tracy,
I must decline the new offer. I appreciate your interest in the property but the new offer just doesn't work for me.
Sincerely,
Hank
Well, this kinda sucks. Ok so I'm now thinking I need to just let it go. I'm running out of time. My contract expires on the 20th of August, and I have no buyer. But I'm not giving up yet. I still have 5 days left. The seller sent me a text and said he was just going to list the property and see what comes up. I said NOT YET, I have until the 20th. He disputed it at first, until he got out his copy of the contract and read it. Then he agreed and said "OK , keep me posted".
Update August 16, 2013 - So last night I got an offer on another one of my properties, and the guy was telling me that he was buying up a heap of houses. His business model was to buy them super cheap, do light rehab, and then rent them out and sell them to another investor as a cash flow. He makes $8,000 - $10,000 on each deal (that's his goal anyway). So I told him about this deal and I sent him some pictures. I told him that we HAVE to close by Tuesday, August 20 since that's when my contract expires. This morning he emailed me and said it's a "go ahead" and asked me to send him the assignment of contract! I sent it to him. I'm waiting on the signed docs back now.
August 20, 2013 Today my contract expires with the seller, and the communication from the buyer isn't that great. He just doesn't have the same sense of urgency that I do when it comes to closing a deal. He says everything is fine...we're closing today at 4:30 pm. Well, that's the same time that my Yoga class starts, so I won't be around to answer the phone if shit hits the fan. The shit USUALLY doesn't hit the fan, but JUST IN CASE.
4:00 pm The seller called me and told me that he was on his way to closing. He told me he didn't have any keys. I told him it's no biggie.
6:00 p.m. No news is good news and there's noone at the title company to confirm this deal closed. I'll send her an email and ask her so that she can reply first thing in the morning.
August 21, 2013
Conclusion: The deal closed. It was down to the WIRE of a last minute. But we pulled it off. Here's the HUD-1 with the assignment fee. I'll be picking up the check this afternoon and I'll post a copy of it.
And Finally, The Check: The amount of the check sucks, but it's better than no check at all!
REAL DEAL: How to Do A Wholetail Deal
Here's the details to the REAL WHOLETAIL DEAL
October 3, 2013 - Update. The deal closed on Monday, October 1. Due to a hangup with the electrical inspection being turned in to the lender, it took an additional 2 days to fund. But it's a done deal today.
Real Deal: The One That Took 100 Years
Date of Initial Contact by the Seller: April 13, 2012
Where This Lead Came From: "Tracy Buys Houses" Bandit Sign
What was the Seller’s Situation: The property was rented to a family member, and they are planning on moving out. He lives out of town, and cant manage the property (and don't want to) long distance.
Initial Offer: April 13, 2012 When I went to see the property initially on April 13, 2012, the tenants were still living in the house. I had a long conversation with the tenant. He was super cool. He said they were moving because the family was growing and the house wasn't big enough any more. The house is rent ready, and doesn't need any work for a rental. I offered the seller $15,000 Cash for the house and asked him to reply by April 15, 2012.
Counter Offer from Seller: April 18, 2012 The seller countered my offer at $27,000 and said he wouldn't sell it for less than that. He said he was going to give it 2-3 more weeks and see if he could sell it for more. So we left it at that.
Contact Made By The Seller: January 29, 2013 The seller sent me an email that read:
"Hi Tracy - I have not sold the house and want to do business with you but April is probably the best window to discuss this matter. I have your contact info and will definitely be in touch. Thanks for your interest."
So I let him brew.
Contact Made by the Seller: March 18, 2013 - He said that he was ready to sell for $25k (which means he came down $2k) I went to see the house for a second time. I contacted him and said that I would have to stay firm at my maximum offer of $22,500.00.
Seller Accepted My Offer (I thought) March 28, 2013 The seller emailed me and said he would accept my offer and asked me to send him the contract. So my VA prepared the contract via HelloSign and sent the request to him for signatures. He never signed it.
Seller Goes into Email Autoresponder : June 28, 2013- I added the seller to my email autoresponder series that sends him an email every 30 days for 6 months. Its very simple. It asks him if he sold the house yet, and lets him know that I'm still interested. At this point, I gave up hope on this guy. He's been stringing me along for months now, but I don't want to mark him as "dead" because he DOES want to sell. I'm just not sure what's keeping him from doing it.
I didn't get a response from my first email. But I did get a response on my second email.
The seller never signed my damn contract!! He got me all excited for nothing. What a tease this seller is.
FORGET HIM. This guy can't make his mind up (that's what I was thinking).
The Beauty of Automation : So even though I think this guy is VERY indecisive, I didn't remove him from the autoresponder campaign. He continues to get emails from me.
GUESS WHO's BACK? August 26, 2013. I received a text message from the seller asking me if I was still interested. (HERE WE GO AGAIN).
So guess what I did? I had my VA prepare another contract and send it to him via HelloSign. This is like the 4th time (I've lost count).
HE FREAKIN SIGNED IT!! August 26, 2013 at 8:23 P.M. Pics or it aint real. See Below. I'm meeting him in the morning at 10:00 a.m. to put a lockbox on the house. Woot Woooooot. I'm still a little hesitant about this. He was so reluctant to sign. What made him change his mind? I'm going to ask him tomorrow. I might even ask him for a photo!!
REAL DEAL: $6,108 Made in 17 Days With an Unexpected Call
And here's a copy of the check (minus the $1000 Binder deposit that I collected from the buyer when she signed the contract - I didn't take a photo of that. My buyers write the check out directly to my company)
CLOSED: March 3, 2014
REAL DEAL: How to Make $23k in 16 Days
Date of Initial Contact by Seller: October 16, 2013
Where This Lead Came From: Website - he filled out the seller information form, AND went ahead and scheduled his own appointment for me to come out and look at the house using ScheduleOnce (which I have enabled on the seller website). I immediately sent the seller my credibility kit via email and confirmed the appointment.
What Was The Seller's Situation: The seller inherited the house many years ago from his parents. He bought the interest from his siblings, and the house has been rented for 15 years to the same person. The tenant died 2 months ago, and he just found out (no, they didn't die in the house). This seller lives in Maryland, and just wanted to sell the house quickly.
Initial Offer: October 18, 2013 - Before I went to see the house, I called the seller on the phone just to feel him out a little more. I asked him "if I paid you all cash and could close whenever you wanted what is the least you'd accept for the house?" He said "$170k. I asked him "what do you think it would appraise for if I had it appraised right now"? He answered "$230k. I confirmed that with some quick research on comps, and immediately I knew that this seller was willing to give up alot of equity. It's time to talk to him in person.
The house is in a very nice, gated golf course community. It's one of the more modest homes in this subdivision. but still very desirable. I knew it would be a quick sale if I could get it for the right price. Upon walking in, my first reaction was that the house was completely outdated, with original carpet ,original cabinets, original bathrooms, etc. It needs about $25k - $30k in rehab. I already can't pay $170k for this. Time to get out my negotiating stick.
Negotiating: There wasn't a whole lot of negotiating that went on. I made the seller 2 offers:
1. All Cash, close in 30 days for $120k. (Exit strategy - wholesale)
2. All Cash, close in 120 days. (Exit strategy - wholetail)
*The house was in good enough condition to qualify for financing, although it was outdated, and in a great location. So I could sell the house either way.
Without blinking an eye, he said "I'll take the $120,000 - lets sign the contract".
The contract: (Signed on October 18, 2013)I got the contract ready using my iPadMini. The seller signed. I asked him for a key to the house. He gave it to me. then off he went to catch a plane to head back to Maryland.
And the House is SOLD to an investor within 2 hours for $140,000.00. We're closing on Nov 1, 2013.
The Nibbling Technique: Just for shits and giggles, I contacted the seller and asked him if we closed earlier than planned, would he sell the house to me for $115,000 He said yes. He signed my amendment via HelloSign. Bam! Another $5k just for asking.
When this closes (Check back Nov 2, 2013) - I'll post up the check. We're doing a double HUD closing on this one (which will cost us a little bit). One of the fastest $23k ever made.
November 1, 2013 - The Deal Closed without a hitch in sight. It was a double HUD closing, and I walked off with a check today for $23,050.00. Bought it for $115,000 - sold it for $140,000 - had to pay for a double closing and. Here's a copy of the check:
They're not ALL this easy, but when they are.....it makes you wanna drink a very large bottle of wine to celebrate!! So that's what I'm going to do tonight. (and yes, I still celebrate after 15 years of closing deals) CHEERS!
November 3, 2013 : Testimonial Came in From Seller via HelloSign. This email automatically goes out to the seller after closing using my Godfather CRM "post closing" workflow. Its a request for them to fill out a testimonial form via HelloSign. I'll then put it on the seller website and in my credibility kit. Here's the testimonial that came in today from this seller.
REAL DEAL: The White Knotty Pine House
I thought you guys would like to read some real life examples of deals that I'm working on and/or closed. So I've created a category called "REAL DEALS" and I'm going to put it out there for MOB exploitation. Hopefully you can read these examples of real deals and find some motivation to get some of your own deals done, or to come up with a creative solution for your sellers that you may not have otherwise thought of. I'll do all of the updating on each individual post, so you'll need to come back to the specific deal pages to get updates. Not all of these will have a happy ending....... since I'm updating these in real time, I don't even know the outcome of them until it happens.
Date of Initial Contact by the Seller: August 12, 2013 at 9:28 a.m. EST
Where This Lead Came From:
This seller came from a ZIP CODE Mailing List. He received a postcard in the mail and then went to the website and filled out the Seller Lead Information sheet. He lives in another city - about an hour and a half from the property.
What was the Seller's Situation:
The seller has rented this property for $1025, and he's just tired of renting it. He also owns 2 other houses. He said he just painted the inside of the house in March 2013, but it still needs a little bit of cosmetic work. The house is currently vacant.It's a 6 bedroom 3 bath house. (has a mother in law suite). I checked the MLS and the property listing expired on August 4, 2013 after being listed for 4 months at $150,000.00
Initial Offer: August 12, 2013 at 2:35 PM EST
I didn't visit the property in person. Instead, I looked on Google Maps to see what the house looked like. Also, I was able to see some photos of the house on Zillow where the property was previously listed on the MLS. I think this would be a pretty easy sale using one of many strategies. The ARV is $169,000. I called him on the phone and reviewed 3 different offers with him. Then he asked me to send it to him in an email so he could review it with his wife. Here is the email I sent to him.
Dear Henry,
Hi! It was nice talking to you. Please use the link below to find attached information about our company Real Results Unlimited, Inc. There are also some nice letters from sellers who we've helped. Please review this information to understand our company.
Per our discussion, here are the offers that I'd like to present:
OFFER #1 --- $89,000 Cash 30 Day closing. Buyer pays all closing costs
OFFER #2 --- $110,000 Cash - 120 Day closing Buyer pays all closing costs
OFFER $3 --- $900 Per Month with 3 year Option at $130,000 - Seller and Buyer Split Closing Costs at the time of closing.
Please review these with your wife, and let me know as soon as you can which one works the best for you. Thank you so much.
Thank You ,
Tracy Caywood - Acquisition Manager
The seller said that he would talk to his wife and get back with me ASAP. So I'm now waiting.
1st Follow Up: August 13, 2013 at 11:30 am - I called the seller to follow up on the offer. Had to leave him a message.
2nd Follow Up: August 14, 2013 10:13 am - I called the seller and talked to him. I asked him if he had talked to his wife about the offers that I made. He said yes, he did. He has "another company" that is coming out to look at the house on August 20, 2013. So he wanted to see what they had to say first. I told him that I would follow up with him on August 20. Looks like I have competition. Doesn't scare me.
2nd Follow Up: October 7, 2013 (Im a little late on this one). I called to follow up. They were happy to hear from me. They lost my phone number and didnt know how to find me. The husband got on the phone and said that they preferred my second offer (the one for $110,000 NET to the seller / close in 120 days). Ok COOL!
This has suddenly turned into a wholetail deal. I explained to the seller what they could expect from me, and that I would need a key to show the property to people. He told me to email him the contract for review, and that they would be in town October 16 for some doctor appointments (they live about 1.5 hr away). he said we would meet in person then to sign the contract. I agreed.
My VA prepared the contract and emailed it to the sellers on October 7, 2013. He called me to confirm that he got it, and confirmed our appointment for the 16th.
Contract Signing Appointment: I met the sellers at the house, as this was the first time I've ever seen the property. I was pleasantly surprised. The only repairs that it really needs is carpet. It's a 2600 Square foot 4 BR house with a 2 BR mother in-law suite/garage apartment. They asked me a few questions about how the process works, and they signed my contract for $110,000 NET. Now It's time for me to get busy.
That's my seller signing the contract ------------------------------------------------->
Marketing Plan: October 17, 2013 - we begin the marketing plan for this property. I've determined that the ARV is about $180k, but for a really quick sale, I'm pricing his at $144,900. I'm turning this listing over to our Realtor (he gets it), and he's going to stick it int he MLS. We'll also do our own efforts to get the property sold. I'll make a trip downtown on Monday, Oct 21 to record my affidavit and memorandum.
Affidavit and Memorandum: Recorded on October 23, 2013
Offer to Purchase from New Buyer: October 24, 2013 Our Realtor presented us with an offer on the house. We have the house listed at $144,900. The VA buyers offered $138,000. We countered at $141,000. We're paying $3k of the buyers closing costs. We all accepted. So what I have to do now is get the seller to sign this NEW contract. This is a wholetail deal, so the contract will be between my seller and the new buyer.
Sellers Signed New Contract: October 28, 2013 After sweating all weekend, I received the signed contract back from the sellers this morning. I also learned something over the weekend when I got a call from Alex Joungblood (THANKS, ALEX!) VA loans don't have any title seasoning issues, so I didn't HAVE to get the signatures from the seller on this contract. I could've done a double closing, using transactional funding, and the sellers would've never seen the contract with the buyer. I'm relatively new to the wholetail deals, so I'm pretty excited to learn this! I didn't have any problems from the seller, but I could see where (even though I explained everything to them) they could have a problem with me making that much money and refuse to sign.
So in the future, if the buyer is conventional or VA funding, I'll do a double closing. If they're FHA, well, then I think I'll have to take the same approach as I did on this deal.
November 1, 2013 : Buyers asked for a Seller's Disclosure to be completed. I emailed it to the sellers. They'll have it back to me on Saturday, Nov 2. Buyers want to do inspection before they go out of town on Nov 8.
November 10, 2013: The buyers backed out of the deal. They said that the house needed $40,000 in rehab, and that was more than they were willing to put into the property. The buyer is active military, and may only be here for 3 years. No big deal. It happens. We put the house back into ACTIVE status, and will make a price reduction soon.
February 21, 2014 - Yes, my friends. It has been 3 months since I made an update on this real deal. But now I have to , since this deal closed yesterday. I'll fill you in on what's been going on. After the home inspection that the buyers had done, the sellers agreed to accept $80,000 NET for the house. I thought that was fair, considering the work that the house needed.
So I continued to market this property. I had SO MANY people claiming that they wanted to make an offer, but noone ever came through. Our contract with the seller EXPIRED on February 17, 2014, and I had written it off as a loss. However, a buyer contacted Dan ON FEB 17th!! and made an offer of $70,000.00. He'd seen it on our website, and was interested in buying another one of our properties. I told Dan to counter at $85,000.00 - with the buyer paying all of the closing costs. The buyer agreed, and he met Dan at Starbucks to sign the contract and give the $1000 Non Refundable Binder Deposit. He closed 2 days later.
MORAL OF THE REAL DEAL: Don't give up on your deal OR on your seller. Work that shit till the bitter end. You never know when the buyer is going to come along and be ready to pull the trigger. Theres a buyer for every property, at the right price, and at the right time.