2/1/2009
I'm taking a little break from work while my Dad is in town, so I don't have a whole lot to talk about real estate wise. Well, except for the fact that I am probably going to lose money on that deal I told you I sold to my Ace in the Hole buyer. He called me at 7 am the morning after he told me he would buy it for 20k, and said he went back to look at it again, and there was more work needed than he initially thought, and that he was sorry, but he wasn't interested. (This is not a good way to start a day off, btw). So, I called the other buyers who were interested a few weeks ago, and both of them passed. Long story short, I ended up getting Ace in the Hole Buyer to take it for 16k (that's what my contract is for), but I am going to have to pay closing costs, so I'm going to lose around $800-$1000. This is not good, but it is better than losing 2k (that's what my earnest deposit is with the bank). This is my first time ever losing money on a deal, and hopefully it will be the last... I did get an offer today for 20k from a hard money buyer, so I am going to see if I can buy Ace out of his contract with me. I'd say there's about a 50/50 chance of that happening. We'll see.
OK, I gotta run- I'm up watching the Australian Open final- it started at 3:30am... Thanks Jason!
P.S.
Can someone send me some information about Than Merrill's product launch? I didn't receive any emails about it this last week.
P.P.S
Sarcasm alert.
Sunday, February 1, 2009
Losing Money and Stuff...
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19 comments:
No Shit!
And what is this crap about "My good buddy, XXXXXX." It's just not possible for them all to be best buddies and get together for sessions of "Kumbaya". Is it?
That is one cool website once you get it all figured out, isn't it?
Kumbaya. That's funny! I don't know how I get on half of their email lists, but it irritates the living shit out of me to get 5 sets of emails from 20 different people that all say the exact same thing. Grrrr..
Yeah, great website. Can't beat the price, either. :)
Steph,
Are you not using any contingencies when you make your offers?
Sorry to hear you are going to lose money.
Brandon
Hi Brandon,
I usually make my offers cash with no contingencies.
I thought for sure I could sell this for at least 20k, esp since I sold a similar one in the same neighborhood for 22k about a month ago...
Seriously Steph....I actually unsubscribed from 5 mailing lists yesterday because I was so irritated. This happens every time there is a new product launch, but this one in particular sent me over the edge.
And sheesh...if this is first time you're ever losing money and its only $800 or so, you're doing awesome!
Hi Shae,
Yeah- this one sent me over the edge, too. I'm used to getting the emails for every launch, but this was totally out of control. I have subscribed to get emails from some of the people, but this time, there were at least 10 new people sending me this crap and I don't even know who the heck they are.
One girl sent the same email out 6 times. I sent her back an email telling her if she did it one more time I was going to blow her computer up. Hehe.
Than who? ;)
WOW! I just read your blog and heard the terrible news... You must be devistated. If there is anything I can do to help just let me know, because I know this is a difficult time for you. But hey Federer will always have next year..LOL... I'm sorry to hear about him losing, even though I had never heard of him before your blog. But seriously, tell us why you think this deal turned out the way it did? Are prices still falling and your buyers are now getting deals cheaper than a month ago. I've run into that a few times, but wanted to hear your thoughts...
Hi Dustin,
Thanks for your sympathies. Not to worry, though- he is going to kick Nadal's ass at the French Open..
As far as the deal goes- I underestimated the repairs by quite a bit, and the fact that it's a 2/1 frame with less than 800 sf doesn't help much either- there is a much smaller pool of buyers who will take something like that. I'm still pretty sure I could find a buyer at 20k, but I'm running out of time and I'd rather just go with this buyer because I know he'll close.
Steph
LOL Steph! You always hit the nail on the head. I think I can count on one hand the number of "gurus" from whom I DIDN"T get an email. Amazing! There were coming in as fast as I could hit the delete key.
Good luck in buying out the contract.
Thanks Bill- I should find out tomorrow if it's going to work out or not. I certainly hope so.
Fed's a crybaby ...YOU are not!
:)
Jimi
I just read the news this morning about Roger...tell him to keep his chin up :) I had to visit your blog and say sorry. I was reading your ps, I thought, wow she wasn't kidding about removing herself from all of the email lists ... hahaha then I read the PPS... I'm slow sometimes. So, You aren't ready to be a landlord yet? I mean to hold onto the 16K house? It looked pretty good from the photos.
Kelly from California
Jimi- watch you you say about my man.
Kelly- No, I have no interest in being a landlord. Maybe some day, but for now it's just wholesaling for me.
Steph,
I thought you had your buyer pay all closing cost. Are you splitting closing costs now? Are you still assigning these? Doing double closings? or the Quit Claim Deed thing?
A little confused.
Hi Aaron,
I normally have my buyers pay all closing costs, but he was not willing to on this deal, so I have to eat them.
I do simultaneous closings. I only used the quit claim method a few times in the beginning. I have never assigned an REO deal, as most banks will not allow the contract to be assigned.
You pickin up what I'm puttin down?
Steph
Steph,
I got it thanks. I'm picking it up. LOL
Thanks,
Aaron
In my city the MLS has 136 pages of bank owned properties, if I am just starting out as a wholesaler don't I want to cut my teeth on these properties instead of spending a bunch of $$$ on marketing? Is there any guide to correctly structuring offers and what you can/can't do with REO's?
Hi Richard,
REOs are a bit more complicated than regular assignment deals, but, like you said, there are so many of them available right now. You will also need some cash for an earnest money deposit ($500-$1000), as well as a pre-approval or proof of funds letter.
If you are just starting out, I would spend some time (a few months, at least), getting to know your market, who the buyers are, and what they are looking for. It will make things much easier on you when you start making offers if you know what a deal looks like.
As far as a guide to making offers- Steve Cook did a call a month or so ago called "The Art of Making MLS Offers" I'm not sure if it's still available to purchase, but I will check with him and see.
Hope that helps,
Steph
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