FHA Offers are Pouring in!

Our property on Challen seasoned on Monday (we owned it more than 90 days) and the FHA offers started pouring in. We have offers from the asking price to $25,000 above the asking price! Our first thought was to take the highest offer. However, being the sea urchins that we are, we decided to analyze all aspects of the offers.





All of the FHA offers we received insist we pay anywhere between $6,000 and $7,300 in closing costs, plus they want us to pay other fees. As it turns out FHA will not allow us to carry a second mortgage for the price difference. So how should we determine the actual best offer?





This is what will happen. The FHA appraiser will dictate the selling price. We must lower our price to what the appraiser dictates. Given that, we are countering on all the offers to include no more than $3,000 in closing costs.  The reality is with FHA, the offer price has nothing to do with the actual selling price. The price will be what FHA says. Someone could offer $100,000 more than the asking price and it will have no relevance to our actual selling price.





A fellow investor decided to base his decision on one that offered a 21 day closing. I think that is a very smart choice. The price will be the price. He selected the offer that will get him his money the fastest.

Series LLC?

We just learned about a new asset protection strategy called a Series LLC. The jury is still out whether to have multiple LLC's to hold your properties or to make use of this Series LLC.





The Series LLC allows you to hold all your properties in one entity so you only have 1 tax report, while protecting your assets as if each property is in it's own LLC.





This is on our list to research, so be on the lookout for our opinion.

FHA Offers are Pouring in!

Our property on Challen seasoned on Monday (we owned it more than 90 days) and the FHA offers started pouring in. We have offers from the asking price to $25,000 above the asking price! Our first thought was to take the highest offer. However, being the sea urchins that we are, we decided to analyze all aspects of the offers.





All of the FHA offers we received insist we pay anywhere between $6,000 and $7,300 in closing costs, plus they want us to pay other fees. As it turns out FHA will not allow us to carry a second mortgage for the price difference. So how should we determine the actual best offer?





This is what will happen. The FHA appraiser will dictate the selling price. We must lower our price to what the appraiser dictates. Given that, we are countering on all the offers to include no more than $3,000 in closing costs.  The reality is with FHA, the offer price has nothing to do with the actual selling price. The price will be what FHA says. Someone could offer $100,000 more than the asking price and it will have no relevance to our actual selling price.





A fellow investor decided to base his decision on one that offered a 21 day closing. I think that is a very smart choice. The price will be the price. He selected the offer that will get him his money the fastest.

Series LLC?

We just learned about a new asset protection strategy called a Series LLC. The jury is still out whether to have multiple LLC's to hold your properties or to make use of this Series LLC.





The Series LLC allows you to hold all your properties in one entity so you only have 1 tax report, while protecting your assets as if each property is in it's own LLC.





This is on our list to research, so be on the lookout for our opinion.

FHA Offers are Pouring in!

Our property on Challen seasoned on Monday (we owned it more than 90 days) and the FHA offers started pouring in. We have offers from the asking price to $25,000 above the asking price! Our first thought was to take the highest offer. However, being the sea urchins that we are, we decided to analyze all aspects of the offers.





All of the FHA offers we received insist we pay anywhere between $6,000 and $7,300 in closing costs, plus they want us to pay other fees. As it turns out FHA will not allow us to carry a second mortgage for the price difference. So how should we determine the actual best offer?





This is what will happen. The FHA appraiser will dictate the selling price. We must lower our price to what the appraiser dictates. Given that, we are countering on all the offers to include no more than $3,000 in closing costs.  The reality is with FHA, the offer price has nothing to do with the actual selling price. The price will be what FHA says. Someone could offer $100,000 more than the asking price and it will have no relevance to our actual selling price.





A fellow investor decided to base his decision on one that offered a 21 day closing. I think that is a very smart choice. The price will be the price. He selected the offer that will get him his money the fastest.

Series LLC?

We just learned about a new asset protection strategy called a Series LLC. The jury is still out whether to have multiple LLC's to hold your properties or to make use of this Series LLC.





The Series LLC allows you to hold all your properties in one entity so you only have 1 tax report, while protecting your assets as if each property is in it's own LLC.





This is on our list to research, so be on the lookout for our opinion.

Septic Tanks in Rialto?

Did you know that there are a lot of houses in San Bernardino County that have their own septic tank? I had no idea until I heard of a fellow investor that purchased, rehabbed, and tried to sell a property in Rialto at a nice little profit. However the appraiser mentioned there was a septic tank on the property and it must be inspected. SURPRISE, SURPRISE.

Unfortunately the septic inspection failed and this investor now has to face a big expense that will have a devasting affect on the bottom line.





Even with the best real estate investment training and coaches, we can't predict everything that can happen with a property. As new investors, it may be well worth the little extra money to spring for a home inspection - even when the bank refuses to allow you that time.

Have you seen this book yet?

I finished reading The Real Book of Real Estate: Real Experts. Real Stories. Real Life. by Robert T. Kiyosaki and totally enjoyed hearing real estate investors discuss their experiences and their expertise. I highly recommend adding this to your collection.

Septic Tanks in Rialto?

Did you know that there are a lot of houses in San Bernardino County that have their own septic tank? I had no idea until I heard of a fellow investor that purchased, rehabbed, and tried to sell a property in Rialto at a nice little profit. However the appraiser mentioned there was a septic tank on the property and it must be inspected. SURPRISE, SURPRISE.

Unfortunately the septic inspection failed and this investor now has to face a big expense that will have a devasting affect on the bottom line.





Even with the best real estate investment training and coaches, we can't predict everything that can happen with a property. As new investors, it may be well worth the little extra money to spring for a home inspection - even when the bank refuses to allow you that time.

Have you seen this book yet?

I finished reading The Real Book of Real Estate: Real Experts. Real Stories. Real Life. by Robert T. Kiyosaki and totally enjoyed hearing real estate investors discuss their experiences and their expertise. I highly recommend adding this to your collection.

Septic Tanks in Rialto?

Did you know that there are a lot of houses in San Bernardino County that have their own septic tank? I had no idea until I heard of a fellow investor that purchased, rehabbed, and tried to sell a property in Rialto at a nice little profit. However the appraiser mentioned there was a septic tank on the property and it must be inspected. SURPRISE, SURPRISE.

Unfortunately the septic inspection failed and this investor now has to face a big expense that will have a devasting affect on the bottom line.





Even with the best real estate investment training and coaches, we can't predict everything that can happen with a property. As new investors, it may be well worth the little extra money to spring for a home inspection - even when the bank refuses to allow you that time.

Have you seen this book yet?

I finished reading The Real Book of Real Estate: Real Experts. Real Stories. Real Life. by Robert T. Kiyosaki and totally enjoyed hearing real estate investors discuss their experiences and their expertise. I highly recommend adding this to your collection.

Our Buyer Cancelled!

Last week was filled with real life lessons in Real Estate. Our "too good to be true" cash buyer backed out, leaving us shocked and even hurt - but one thing to remember - this IS a business. There are people out there that have a lot more experience than we have, and that's why we need to rely on others to tell us when something isn't quite right.





First we thought we would be able to keep that generous earnest money - but NOOOOOO. This guy cancelled within the California's RPA 17 day period. The purchase contract gives the buyer 17 days to change their mind! And they get their deposit back.





Learned Lesson #1: All cash buyers don't need 17 days to change their mind. The next time I'm approached with an all cash buyer, I will have paragraph 14b changed to 3 days.







The other odd thing about this purchase contract is the buyer wanted to choose the escrow company. According to my realtor, it is standard practice that they seller chooses the escrow company. I should have listened to her because sure enough, this buyer never put up a down payment, and we were scrambling and signing every disclosure document that came our way.





Learned Lesson #2: Seller chooses the Escrow company. When you have your rehab on the market, it's easy to accept your first offer. Listen to your realtor when they express concerns. We were so desperate to have this deal go through, we simply accepted the offer. Had we countered with our realtor's recommendations, we wouldn't have lost precious time while our house was not on the market.

Our Buyer Cancelled!

Last week was filled with real life lessons in Real Estate. Our "too good to be true" cash buyer backed out, leaving us shocked and even hurt - but one thing to remember - this IS a business. There are people out there that have a lot more experience than we have, and that's why we need to rely on others to tell us when something isn't quite right.





First we thought we would be able to keep that generous earnest money - but NOOOOOO. This guy cancelled within the California's RPA 17 day period. The purchase contract gives the buyer 17 days to change their mind! And they get their deposit back.





Learned Lesson #1: All cash buyers don't need 17 days to change their mind. The next time I'm approached with an all cash buyer, I will have paragraph 14b changed to 3 days.







The other odd thing about this purchase contract is the buyer wanted to choose the escrow company. According to my realtor, it is standard practice that they seller chooses the escrow company. I should have listened to her because sure enough, this buyer never put up a down payment, and we were scrambling and signing every disclosure document that came our way.





Learned Lesson #2: Seller chooses the Escrow company. When you have your rehab on the market, it's easy to accept your first offer. Listen to your realtor when they express concerns. We were so desperate to have this deal go through, we simply accepted the offer. Had we countered with our realtor's recommendations, we wouldn't have lost precious time while our house was not on the market.

Our Buyer Cancelled!

Last week was filled with real life lessons in Real Estate. Our "too good to be true" cash buyer backed out, leaving us shocked and even hurt - but one thing to remember - this IS a business. There are people out there that have a lot more experience than we have, and that's why we need to rely on others to tell us when something isn't quite right.





First we thought we would be able to keep that generous earnest money - but NOOOOOO. This guy cancelled within the California's RPA 17 day period. The purchase contract gives the buyer 17 days to change their mind! And they get their deposit back.





Learned Lesson #1: All cash buyers don't need 17 days to change their mind. The next time I'm approached with an all cash buyer, I will have paragraph 14b changed to 3 days.







The other odd thing about this purchase contract is the buyer wanted to choose the escrow company. According to my realtor, it is standard practice that they seller chooses the escrow company. I should have listened to her because sure enough, this buyer never put up a down payment, and we were scrambling and signing every disclosure document that came our way.





Learned Lesson #2: Seller chooses the Escrow company. When you have your rehab on the market, it's easy to accept your first offer. Listen to your realtor when they express concerns. We were so desperate to have this deal go through, we simply accepted the offer. Had we countered with our realtor's recommendations, we wouldn't have lost precious time while our house was not on the market.

About Owner Finance

*Owner Finance as an Exit Strategy*

Owner Financing, if you remember, is a pretty neat strategy. In forming our owner finance deal, we raised our price, and structured a possible note with 20% down and a variable interest rate depending on the applicant. If you remember, you can hold that note for 6 months and then sell it to a note-broker for a discount.





I'm glad I went on the 2nd bus trip because I had forgotten that you can have hard money attached to the property and still owner finance. If you remember, you do the deal, but don't file the paperwork with the County until you sell the note. Then, if they don't pay you for any reason, you merely evict them and YOU get to keep that down payment.  What a deal!

Next time we'll keep you up-to-date on our escrow process and notify you on our next flip.

About Owner Finance

*Owner Finance as an Exit Strategy*

Owner Financing, if you remember, is a pretty neat strategy. In forming our owner finance deal, we raised our price, and structured a possible note with 20% down and a variable interest rate depending on the applicant. If you remember, you can hold that note for 6 months and then sell it to a note-broker for a discount.





I'm glad I went on the 2nd bus trip because I had forgotten that you can have hard money attached to the property and still owner finance. If you remember, you do the deal, but don't file the paperwork with the County until you sell the note. Then, if they don't pay you for any reason, you merely evict them and YOU get to keep that down payment.  What a deal!

Next time we'll keep you up-to-date on our escrow process and notify you on our next flip.

About Owner Finance

*Owner Finance as an Exit Strategy*

Owner Financing, if you remember, is a pretty neat strategy. In forming our owner finance deal, we raised our price, and structured a possible note with 20% down and a variable interest rate depending on the applicant. If you remember, you can hold that note for 6 months and then sell it to a note-broker for a discount.





I'm glad I went on the 2nd bus trip because I had forgotten that you can have hard money attached to the property and still owner finance. If you remember, you do the deal, but don't file the paperwork with the County until you sell the note. Then, if they don't pay you for any reason, you merely evict them and YOU get to keep that down payment.  What a deal!

Next time we'll keep you up-to-date on our escrow process and notify you on our next flip.

We Accepted an Offer!

OK, I admit I was a little nervous. Our house hasn't gone through the 90 day seasoning and I was concerned about the looming November 30th tax credit deadline. Our house would be seasoned the end of October - which was cutting it a little close to have a deal done before November 30th.





But, I remembered one of the strategies we learned in both the 3 day seminar and on the bus tour - owner finance. So I started advertising on craigslist, backpage, and all the other free sites I could find regarding the house for sale with owner financing. I started to get some inquiries. But then, on Friday afternoon, Eileen had just come over to my house for a gloom and doom pick me up attitude adjustment and then, "THE PHONE RANG".





It was my agent, Shirley DeHart (from Caldwell Banker in Riverside), telling me I had an "ALL CASH OFFER" for my house. My jaw hit the ground. Poor Eileen just waited patiently as I pulled my jaw off the floor and struggled to re-engage my voice box. Since we are BOTH unemployed, this news couldn't have come at a better time.





OK, so the offer was a little less than we wanted, but with an all cash offer, that totally eliminates a lot of risks in the transaction and lowers the closing costs involved.  





So Eileen and I talked about it for a little while, and Eileen jokingly said "I want $20k in escrow," - then I looked at the paper work - they offered 10% in escrow - not the measly $2k or $5k we learned about in class. How did we get so lucky our first time around?





So we are now entering escrow and signing another hundred or so legal documents. We'll keep you posted on our progress!

We Accepted an Offer!

OK, I admit I was a little nervous. Our house hasn't gone through the 90 day seasoning and I was concerned about the looming November 30th tax credit deadline. Our house would be seasoned the end of October - which was cutting it a little close to have a deal done before November 30th.





But, I remembered one of the strategies we learned in both the 3 day seminar and on the bus tour - owner finance. So I started advertising on craigslist, backpage, and all the other free sites I could find regarding the house for sale with owner financing. I started to get some inquiries. But then, on Friday afternoon, Eileen had just come over to my house for a gloom and doom pick me up attitude adjustment and then, "THE PHONE RANG".





It was my agent, Shirley DeHart (from Caldwell Banker in Riverside), telling me I had an "ALL CASH OFFER" for my house. My jaw hit the ground. Poor Eileen just waited patiently as I pulled my jaw off the floor and struggled to re-engage my voice box. Since we are BOTH unemployed, this news couldn't have come at a better time.





OK, so the offer was a little less than we wanted, but with an all cash offer, that totally eliminates a lot of risks in the transaction and lowers the closing costs involved.  





So Eileen and I talked about it for a little while, and Eileen jokingly said "I want $20k in escrow," - then I looked at the paper work - they offered 10% in escrow - not the measly $2k or $5k we learned about in class. How did we get so lucky our first time around?





So we are now entering escrow and signing another hundred or so legal documents. We'll keep you posted on our progress!

We Accepted an Offer!

OK, I admit I was a little nervous. Our house hasn't gone through the 90 day seasoning and I was concerned about the looming November 30th tax credit deadline. Our house would be seasoned the end of October - which was cutting it a little close to have a deal done before November 30th.





But, I remembered one of the strategies we learned in both the 3 day seminar and on the bus tour - owner finance. So I started advertising on craigslist, backpage, and all the other free sites I could find regarding the house for sale with owner financing. I started to get some inquiries. But then, on Friday afternoon, Eileen had just come over to my house for a gloom and doom pick me up attitude adjustment and then, "THE PHONE RANG".





It was my agent, Shirley DeHart (from Caldwell Banker in Riverside), telling me I had an "ALL CASH OFFER" for my house. My jaw hit the ground. Poor Eileen just waited patiently as I pulled my jaw off the floor and struggled to re-engage my voice box. Since we are BOTH unemployed, this news couldn't have come at a better time.





OK, so the offer was a little less than we wanted, but with an all cash offer, that totally eliminates a lot of risks in the transaction and lowers the closing costs involved.  





So Eileen and I talked about it for a little while, and Eileen jokingly said "I want $20k in escrow," - then I looked at the paper work - they offered 10% in escrow - not the measly $2k or $5k we learned about in class. How did we get so lucky our first time around?





So we are now entering escrow and signing another hundred or so legal documents. We'll keep you posted on our progress!

Multiple Exit Strategies

*Never go into a deal without an exit strategy*

 

It's obvious that real estate investment can be full of surprises, which is why you need to have multiple exit strategies.

 

Although we are still waiting through our FHA mandated 90 day seasoning period, we know that if the FHA appraiser claims the price to be lower than the offer/accepted price, then we must sell it at that price.

 

Next time, we will discuss our exit strategies and the reasons we chose those strategies.

Multiple Exit Strategies

*Never go into a deal without an exit strategy*

 

It's obvious that real estate investment can be full of surprises, which is why you need to have multiple exit strategies.

 

Although we are still waiting through our FHA mandated 90 day seasoning period, we know that if the FHA appraiser claims the price to be lower than the offer/accepted price, then we must sell it at that price.

 

Next time, we will discuss our exit strategies and the reasons we chose those strategies.

Multiple Exit Strategies

*Never go into a deal without an exit strategy*

 

It's obvious that real estate investment can be full of surprises, which is why you need to have multiple exit strategies.

 

Although we are still waiting through our FHA mandated 90 day seasoning period, we know that if the FHA appraiser claims the price to be lower than the offer/accepted price, then we must sell it at that price.

 

Next time, we will discuss our exit strategies and the reasons we chose those strategies.

Appraisers in CA

As you may know, we've succeeded in acquiring a property, fixed it up and it is now on the market.  However we need to tell you about our experiences with appraisers and what we've heard about dealing with appraisers in California.

Appraisers can be the biggest thorn in your side when it comes to getting hard money or even getting a good sales price for your  home.  The reason?  Appraisers are blamed for the real estate crisis that exists today.  Most appraisers are afraid and consistently appraise at lower prices - even though the natural economics of supply and demand show differently.

We had 2 appraisers from investors come out to our little house.  The first appraiser came out before the rehab started and appraised it at $20,000 OVER what we paid for it.  That made us feel really good - we got a good deal!

Then, once the rehab was almost finished, a second appraiser came out and appriased it for only $5,000 more than the previous appraiser.  Now that made us sick since we put over $30k into the property.  This reduced the amount of hard money we could get out of the property.

In addtion, we've seen other investors sell properties in California where the appraisal came in much lower than the agreed upon asking price, thus reducing the anticpated profit significantly.

Appraisers in CA

As you may know, we've succeeded in acquiring a property, fixed it up and it is now on the market.  However we need to tell you about our experiences with appraisers and what we've heard about dealing with appraisers in California.

Appraisers can be the biggest thorn in your side when it comes to getting hard money or even getting a good sales price for your  home.  The reason?  Appraisers are blamed for the real estate crisis that exists today.  Most appraisers are afraid and consistently appraise at lower prices - even though the natural economics of supply and demand show differently.

We had 2 appraisers from investors come out to our little house.  The first appraiser came out before the rehab started and appraised it at $20,000 OVER what we paid for it.  That made us feel really good - we got a good deal!

Then, once the rehab was almost finished, a second appraiser came out and appriased it for only $5,000 more than the previous appraiser.  Now that made us sick since we put over $30k into the property.  This reduced the amount of hard money we could get out of the property.

In addtion, we've seen other investors sell properties in California where the appraisal came in much lower than the agreed upon asking price, thus reducing the anticpated profit significantly.

Appraisers in CA

As you may know, we've succeeded in acquiring a property, fixed it up and it is now on the market.  However we need to tell you about our experiences with appraisers and what we've heard about dealing with appraisers in California.

Appraisers can be the biggest thorn in your side when it comes to getting hard money or even getting a good sales price for your  home.  The reason?  Appraisers are blamed for the real estate crisis that exists today.  Most appraisers are afraid and consistently appraise at lower prices - even though the natural economics of supply and demand show differently.

We had 2 appraisers from investors come out to our little house.  The first appraiser came out before the rehab started and appraised it at $20,000 OVER what we paid for it.  That made us feel really good - we got a good deal!

Then, once the rehab was almost finished, a second appraiser came out and appriased it for only $5,000 more than the previous appraiser.  Now that made us sick since we put over $30k into the property.  This reduced the amount of hard money we could get out of the property.

In addtion, we've seen other investors sell properties in California where the appraisal came in much lower than the agreed upon asking price, thus reducing the anticpated profit significantly.