NEW INVESTOR NEEDS ADVICE ON POSSIBLE 1ST DEAL

[kimbella]

I received a call from a seller today in response to an inquiry on an ad , first of all I am located in San Pedro California and the home is a 2 bed 1 ba home in the city of carson ca. I do not have too much detals yet however after speaking with her she stated that she doesn't even know what the market value is so she is not sure how much she wants for it , I am trying to find out the comps in the area right now so I will have an idea , I have a general sales contract however I am wondering if this turns out to be  a good deal should I immediately complete the sales contract with her there or is there a purchase offer form or something else I can use to tie up the deal ?

[Eureka]

If it's a good deal you should get it under contract.  However, to protect yourself, be sure and leave yourself an "out".....contingent upon satisfactory home inspection, financing, termite inspection, whatever, and give yourself a time period that is fair enough to you the buyer as well as the seller, 5 business days, whatever time you think you need to make a fair evaluation of the property of the property while showing her that you don't want to just tie the property up and then rescind the contract due to a minor issue.

[kimbella]

thank you do you know if there is a place were I might be able to get a contract that is usually used by investors or maybe a title or loan company?

[Eureka]

First, you can probably go to the California Association of Realtors website and download an "offer to Purchase" contract.  I used to have my real estate license in Ca, but it's been a while.  Second, I know that many investors don't care to use Realtors, but there are many benefits to doing so.  If you are not using a Realtor, please contact a real estate attorney or get with a seasoned investor to help you out on the first couple of deals.  If you decide against either of these, get the contract and read it thoroughly and understand it.  I'll see if I can find a contract and send it your way or direct you to a link.  Good luck!

[kimbella]

you are the absolute best !! thank you for the priceless info , Iam really shaking in my boots though  

[Eureka]

You'll find a contract package at http://www.nupplegal.com/casales.html.  Although you could probably find on for free somewhere.  You may want to do a keyword search for "California Purchase Offer Contract"

[Eureka]

You are quite welcome.  First deals can be scarey, but hang in there.  My husband and I bought our first 4plex in Redding a couple of years ago.  Bought at a great time, sold at a great time.  Made $125K in less than a year (is that insane or what???).  We then took that 125K and leveraged it to buy 3SFH's and 6 duplexes.  It has been one heck of a two year ride!  If you can do multifamily, that is what I would suggest.  You can buy up to 4 units with a residential loan.  That means that with only a very small amount if any downpayment,  as long as you are willing to live in one unit for 1 year, you can finance a 4plex (or tri or duplex) just as you would a SFH.  The other three tenants make your mortgage payment, then after a year (I don't know if the FHA police come looking for you if you live there for less than a year, doubt it), you can move on,either maintain a nice cash-flow, or reappraise, do a cash out refi and have money to put down on something else.  We gave up on CA because we couldn't afford to put our money back into the market, but there are better deals with just as much opportunity for appreciation.  OK, you didn't ask for all of that but.....

[kimbella]

no not at all , I am so grateful to all the info you have provided and welcome all and any advice , If you don't mind I would like  to keep in contact with you , just to let you know how things are going and maybe to pick your brain a bit   if you don't mind of course  

[moke]

hi

just nit picking


sales contracts are to protect R/E

you dont have to use them.

moke.

[SD Newbie]

Kimbella,
what is your plans for the property?  Are you holding it as a rental or do you plan to put a little work into and put back on the market?

[kimbella]

i plan on putting some work into it and putting it back on the market .

[kbrandau]

Yes, you should have the sales contract in hand to be completed at the next meeting, after you determine the market value, and "you're" value for the property, apparently with the key points of the seller won't have to make any repairs or improvements, and with the contingencies written in to give you an out, if one of the inspections comes back negatively.

The State Real Estate Commission should have forms you can print off, and strike out any part of the contract you don't wish to use, and intitalled by both parties. Or using simlar verbage write the contract to fit your deal.  Or contact a real estate attorney to prepare the deal for you.

Using a Realtor would bring knowledge and expertise into the deal, but also cost your seller, which could hurt your offer price.

Good Luck!