realestate-newbies

Hey everyone,

I’m back with news and new information.  For returning viewers, you know I bought John Alexander’s program.  He has a couple of strategies and tools that are great.  One tool he offers is a title company that will do a simultaneous close, saving you money from doing a double close.

If you are truly a real estate newbie the concept of a close may be new to you.  A close is when you take your real estate deal to either a title company or an attorney (depending on your state) and close or sign all the paperwork to buy and make your deal legal.

Many investors will go out and find a good deal on a property.  They will have the owner sign a contract and put down a little earnest money (this can be as little as $50 or $100) in an escrow account.  That money is your commitment and is put on the deal just to say: Hey, I am going to do this deal.

An escrow account is an account that can be set up with your title company or attorney. After the deal closes, you get your earnest money back.  (That is if you actually close the deal.)

Definitions - To flip, is basically to get a deal under contract and then turn around and either sell it to an end buyer at closing, or sell it once it has been rehabed.  If this is something you are looking to do, be careful about how your contracts are worded.  Some contracts have seasoning issues (Seasoning - you have to own the house for a period of time before you can resell.) and you don’t want this to stop you as an investor from getting your deal resold. (This seems to be an issue when dealing with a bank owned property where you are using one of their contracts.)

Wholesaling -  wholesaling is basically the same thing as flipping, but you’re selling your deal to another investor instead of an end buyer, but giving the investor a better deal on the property than you would sell to a retail buyer or end buyer.

If one is wanting to flip or wholesale a deal this is basically how this works.  At the beginning, once our investor is able to find a great deal and signs a contract with the owner to buy and resell the property, he/she can start to market the property to buyers, and then close with the best pre-approved buyer.

It is pretty customary for a deal to close from the beginning of contract within 30 days, but this can be done even faster if our investor finds the right buyer, or can take a little more time if the investor can talk the seller into allowing it.

In the best case scenario, the investor wants to assign (a part of the Alexander technique) the contract over to the new buyer, which makes for only one close, eliminating double closing costs, or rather closing to buy the property and then flipping the property to the buyer which equals two closings with double the costs.

If this is a technique you are interested in doing, I recommend purchasing Mr. Alexander’s program, as it walks you through this process step by step and gives you all the correct paperwork you would need to tie up and close a deal like this.  You can learn even more about this program at http://www.weprovidethecash.com

The one missing link in Mr. Alexander’s program right now as far as I can see is a recommended lender for your end buyers who will lend to more than spotless or A credit.

I thought I had found a lender who would lend to all types of credit, but that seems to have fallen through and will not work for the time being.  The company I recommended in an earlier post is not accepting any applications at this time.  I’ll let you know if that changes.  If anyone reading this blog has any recommendations, please let me and the other readers know.  I am sure I am not the only one looking for good lenders.

Or if any more seasoned investors are reading through, and you see I’ve made a mistake, please comment.  I’m a newbie too, and I more than welcome your instruction.

Another note on lending, I did find that if you have an FHA acceptable house, FHA will lend to buyers with only 580 credit scores or better.  More on this later once I have a chance to do more research.

In regard to wholesaling, I do have a new recommendation for all you newbies out there.  Here is a site I happened upon when I was looking for lenders.  www.askaexpertwholesaler.com

This site is run by a guy out of Mississippi who is wholesaling property left and right, he states he is averaging the close of 20 deals a month.  He is a very down to earth, blunt, but knowledgeable guy.  He doesn’t pull any punches and isn’t going to let you either.  His blog at the above URL is free.

He has a new site which he charges for (he tells you about it at the free blog) that will teach you how to pick up buyers, and you can sign up with him for your first month free, and then it’s under $30 a month after that.  I think he may be dyslexic like me, but if you can read through the dyslexia, you will get a lot of great information.

As for my first deal, I have found an auction that will happen on Jan 27th via the government for a house that is only a couple of blocks away from my current address.  Someone is holding an open house for the property today, and my husband and I are going to go take a look.  Will let you know the rest later.

Lisa