Jim Ingersoll
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It is not easy to wholesale to owner occupants because they rely on conventional financing.
Your focus for the owner occupant model would need to be secure a property with seller financing (sub-2, etc). You could then Re-sell it to a homeowner on a Wrap. That way your buyer would not need to go get conventional financing. I think this model will work better for you in today’s markeplace.
Jim
Tim
Thanks for the question. I climbed that corporate America ladder until it made me sick. I left it two years ago.A couple years ago I started wholesaling. That allowed me to cover my living expenses and leave my job. But really more importantly it forced me to learn to market, negotiate and make many, many offers. We wholesaled in very high volume the past couple years. I have also purposefully tried to do all sorts of different creative transactions.
I think today’s market is a bit different from a wholesaling perspective. First, investors funding is not as easy to get (i.e. Fannie Mae limits investors to 4 properties), title seasoning and guidelines are changing continually now and there are many great foreclosures available for investors to buy.
I am still wholesaling, but that is not my only mode for covering my living expenses in 2009. I think you should put together a plan that includes wholesaling, buying and selling with seller financing, using options to control properties, master lease some houses, etc.
Please follow up if you have more questions
Thanks
JimI tell them the EMD is held in escrow at the settlement agent. I also use language that says I will put it there upon the specific request of the seller. One time I gave a seller too much earnest money, sold his house and then found out there were unresolvable title related issues and I lost my money. Now I dont normally give it directly to the seller at all.
Jim
I think part of the answer comes in the financing of the person buying your option at 90%. I dont think current guidelines will allow the financing of the option using a simultaneous close because you will have no title seasoning. It would not be an issue if you had a cash buyer, but there are few homeowners who are really cash buyers these days
However, it may work if you lease option the house and hold it for 90 days before re-selling it at the 90% level. Given todays market pace it is probably realistic to hold onto the option for 90 days total cycle anyways. You would need to verify that holding the lease option 90 days would suffice for title seasoning.
Just my .02 cents
Jim
That is a great question. It was easier to get deals closed a year ago than it is today. The key is always in the financing. Sometimes I feel like we are really just selling mortgages rather than houses because people will buy as much as stuff as I can help them get financed.
You do have some options:
1. Buy with seller financing, sell with wrap around financing
2. Build very strong relationships with private lenders and hard money lenders. If you completely understand their lending guidelines, products and programs you can help get people the financing. I work very closely with strong hard money lenders, depending on the strength of the borrower I decide which one to send the buyer to use. My lenders communicate very well with me so I can try to know early on if there is a problem.
The other thing that helps your deals not fall through is to conservatively estimate your repairs and after repair value. If you under-estimate repairs or over estimate comps just to get a contract – you are in danger of the deal falling through.
Congrats! I am so happy that you can leave that corporate world.
I also have a degree in electrical engineering and plan to never use it again!
I left the corporate world after climbing that crazy corporate ladder until it made me puke.
Real Estate has made me unemployable. The head hunters still call me and they laugh when I tell them I an unemployable because of real estate.
There are so many niche markets, just find the ones you enjoy the most and you should find that life has never been better!
Best of luck
Jim
Jackie
I have never found a single site with so much information that is available. The forum is a great place to ask questions and learn from others.
My favorite part of this site is the learning annex. I can easily download the audio onto my ipod and learn while driving, exercising, etc. There is a ton of very relevant information in the learning annex and I love it all.
Thanks for leading the effort to establish a world class site.
Jim
