My Real Etate Mentors
This one looks good. We are looking at cell D 126.
Since it is over $100, I would send an offer. I am attaching a template for a letter of intent.
There is a video on the portal that will explain how to fill it out.
Fill it out and send it back to us. We will make sure it is good.
I would start with a 15% discount from the asking price.
Pip
I would tell them you are a wholesaler and are working on many properties simultaneously. You won't do more on the EM, and you will have a condition in your contract that if they get a better offer, we will walk away. You will be giving them another option for marketing to different people. We know it may be different than what you are familiar with, but we think we are another option for you and the seller. The marketing area increases and the realtor gets both sides of the commission, so should be minimal risk to the seller and an excellent opportunity for the realtor. We understand if this doesn't work, we will move to another property.
This has enough cash flow (Cell D 126) to make an offer. We have videos on the student portal under resources. Go to the video for a letter of intent. Please fill out the attached documents and send them back to me. I will make sure everything is good before sending it to the realtor. Let's start at a 15% discount on the asking price.
From the current tenant or any potential lease option tenant-buyer, we need to find out:
How much do they have to put down on the property?
How much can they afford per month?
What is their income or combined income?
Do they have a house they are interested in?
What is the price of this house?
Have they talked to a lender?
If not, then they need to.
If yes, then did the lender tell them how long it would take to qualify?
What does the tenant-buyer need to do to get qualified?
It is fine to tell the seller that you are going to be assigning it to another investor if they want to know.
We have until August 22 to see if we can find another buyer. If not, we will exit out of the deal.
However, we can be building our database of buyers during this time and learning a ton as we go.
They can continue to market it, and if they get a better deal, good for them. There is really no downside to the seller/realtor in this deal.
Let me know when both parties have signed everything.
Next steps once everything is signed.
Get on as many FB Real estate groups as possible. (You can do that now before it is signed).
You will start running ads on FB Marketplace and Craigslist.
The ad should be something like this.
Investor has contract for 5 unit property for sale.
Experts say it is worth $625k.
I will sell it for $550,000!!! $75,000 REDUCTION
Hopkinsville KY.
Call now it won't last!!!
Over 7% CAP RATE.
Don't send any pictures or the exact address on the ad only send it to people who inquire about it.
Remember if they don't want this one then make sure you ask them what they are looking for and start to build you buyer's database.
Pip
Go to Redfin.com, Crexi.com or Loopnet.com. Most of those websites have income and expenses on them already.
If that doesn't work, we can estimate some stuff.
If you can find the listing many times, there are taxes on there. If not, we can go to the county assessor's website where the property is located and get the taxes.
We can estimate insurance as $100 per month for a single-family home. For a multi-family home, we can do $75 per unit per month.
Rents can be gotten from different sources like Rentometer.com, and Zillow.com, or you can call property managers to get that information. There is a video on the portal that shows you how to call property managers.
Pip
You can search for both traveling nurses, and the
Data they supply for the demand in that area of Cincinnati on Furnishedfinders.com. You will be able to compare any market nationally with the demand of each market and average cost of monthly stays for your property type.
You can visit this website to see the demand for housing travel nurses and/or working professionals. You’ll encounter both on this website.
Go to the page “Search Our Map” to find comparable listings. If you’re offering the entire house, you’ll need to filter it to show only “Entire House”.
You can also search for the demand in your city. Go to “Resources” and then “Get The Travel Nurse Demand In Your Area (Free Report)”. Enter the “City” and click “View Stats”.
You can also call them directly to help guide you on all the resources they provide.
The proximity to the hospital is a big plus as they can walk there.
You can also visit the hospital and ask how may travel nurses are hired and how often. Also ask if they’re willing to recommend the nurses to your house, provided you show them photos of course after you renovate and furnish.
In my experience, Traveling Nurses prefer their own space vs. a shared space. That means smaller homes are more desirable as I can usually get $2,000 for a 1B/1B. Only once was I able to rent a 2B/1B to two separate nurses, each staying in their own private rooms at $1,200 per room x 2 = $2,400.
You can also list on Airbnb, VRBO, and Booking.com as a 31 day minimum stay. In my experience you’ll be able to get higher monthly rate, between $3,000 - $4,000 for a 3B/2B. Since yours is a 4B/3B, you should be able to get a bit higher. Keep in mind that with monthly rentals, if 2 separate Guests book with a 3-week calendar separation in-between, you won’t be able to generate revenue for those 3 weeks if your calendar requires a 31 day minimum. But if the city allows short-term rentals, you can lower the minimum stay to fill it in with bookings.
Subject to:
Could seller still hold a second mortgage? Yes the seller can. What second martgage will they hold if the students are taking over the first?
Does deed transfer and/or get recorded? Deed transfers yes and gets recorded.
Is there a semi-standard timeframe for sub to to stay in place and then refi out later? This depends on what the sellers wants. The ones I have done I included a 5 year balloon.
How do they insure seller is making mortgage payment? The students will be making the mortgage payments. Or a escrow account can be set up where payments get taken out from.
Do we have paperwork we can share with them? What paperwork is required? Does it get recorded? I attached a contract I use. I give that to my attorney and he takes care of the rest : ) I suggest they send this to their local attorney to review.
Is closing at a title company? What is different? Title company is involved to record deed and receive funds if there is a down payment.
Do they need an attorney rather than the title co? Depends on the state. I use a attorney that can also do title work.
What other things should they ask or should they know?? I would get a copy of the current mortgage agreement to check for rate, balance, due on sale clause, etc.
If you're familiar, you're more than welcome to contact them directly. If you do a BTDT with them, I'd still like to listen after the fact or if it's just by phone, perhaps I could participate. It's Marlene & Jason Harvey from 6/22/2023. Pls make sure they know you're following up at my request because I told them I would get back to them. If they want more details or discuss this further then I can help them on a BTDT call.
I’ve done lots of sub2 deals and ‘creative’ seller finance deals. My first advice would be to see if the monthly rent will cover three mortgage payments plus tax and insurance and any other fees, HOA, Maintenance reserves, etc.
The next thing I would do is purchase the home in a land trust. I would call the trust the name of the seller such as if their last name is Smith it would be the Smith family land trust. Your LLC Or someone that you trust will be the trustee for the trust and your LLC or you Are the beneficiary of the trust. The beneficiary is not recorded anywhere, but it kept in your safe, so that neither Bank or anyone else knows that you get the benefit of this property. By doing this, the bank will think the family has moved the property into a trust for a state planning purposes, and they will not realize they have sold the property because you want to avoid the bank calling the mortgage due in full, with the due on sale clause.
The next thing I would do is start calling real estate attorneys. I usually start the conversation by asking them if they personally have any investment properties and if so, how many. If they are an active investor, they probably are more familiar with creative finance. But then I ask them if they have closed any subject to deals or other creative finance deals. I want to know if they are familiar with writing land trusts. When you find an attorney that answers yes to all of these questions, then you have found your attorney to do the paperwork and close this transaction for you. It might take a minute but you will find one.
If he or she is an active investor, you can share deals with each other, and possibly JV on deals together in the future.
You can go ahead and use the regular Hawaiian state real estate contract. If it does not have a place under financing for two, then write in see page and item number ———. There should be a place at the end of the contract that says other items, and I would write in there that this is a sub to transaction, and I would write in the terms of their mortgage that you will be taking over, including interest rate PITI payment And the length and balance of the loan. Go back and put the page and item number in the blank once you figure out where that additional item is. Usually, it’s at the very end of the contract there’s a place for additional terms.
Good luck with this and you can call me anytime that you want to ask questions or discuss further. Thanks, Cheryl