I think have a purchase contract....now what!

[eager2learn]

I am thinking of making an offer on a property and have to get the seller to sign a purchase contract. Question is once I have the contract what do I do.... What exactly is the process after you have aquired THE purchase contract? I plan to use the contract together with other paperwork and either apply for hard money/private financing or assign it to another investor. What roles do our lawyers play in all of this? What if she will only sign in the presence of a lawyer? Just how complicated can this get?

I heard I can get a good contract from my local realtor's organization or from my lawyer...is that true?  I have a basic purchase contract from a RE course I purchased but have heard I should get one that covers my area.

Any help would be greatly appreciated :D
eager2learn

[tedjr]

Howdy Eager2learn:

You need some serious help. I am glad you came to this site. I will try to help best I can with a few words. You may want to seek a partner and or mentor to help you on your first deal or two even.

Before even getting an offer together make sure it is a good deal way below retail where the seller needs to sell. Hard money lenders only loan a max of 70% loan to after repaired value. It is expensive to borrow and fix and carry and sell a vacant property.

Contracts can be found on line at least here in Texas at the Real Estate Commission web site. Title companies have them as well and all Realtors are required to use the standard forms.

The forms are standard so there is only so much a lawyer may want to add or delete depending on the situtation. A Realtor should not advise you how to do this but will help you fill out the blanks as they relate to closing date, names, address, legal discription etc. If the seller wants a lawyer that is perfectly OK and give them at their expense a few days to get it to the lawyer. Sometimes this is just a stall technique to hopefully give them time to get a better offer. You can put a deadline in the offer saying that it will expire at high noon next Friday the 24th or something like that.

The HML will want an appraisal of the property most of the time it will need to be done by an appraiser that they prefer. Be sure to get your contract subject to getting a loan approved or you may lose your earnest money if you can not get a loan.

You will also need a detailed list of the work to be performed and a cost estimate or bid from a contractor. You should have a good guess of this dollar amount before you even begin the process as it will save you and the seller and the lender time and money.

This is just an over view and there are more involved such as inspecting the property by a licensed inspector if needed and getting insurance to cover the rehab to name a few of the steps.

Get some help if you need it either from other members of this site or a mentor or partner . It can be costly if you make any lagre mistakes

[eager2learn]

Hi ted,

Thanks for the advice. I figured as much....that's why it is best I assign the contract to another investor. I will do my due dilligence and research the property well.

The seller is very eager to sell. She has a whole host of tenant problems and the house is in a state of disrepair. I am confident I can bring the price down enough so the rehabber will have 15%- 20% profit after all is said and done.

My friend is an electrician/contractor and I plan on taking him through the house.   He'll connect me with proper people for such a project.  

I know of several investors in my state that I've found online who would probably work with me. Either I can assign the contract or have them apply for HML and I over see the  project.....let's see what happens

Thanks ted
eager2learn

[tedjr]

Howdy again Eager2learn:

Sounds like you have a good plan now and a willing seller. I think you will do well on a deal like this. Keep motivated. Let the forum know if you need more help or ave more questions