Lonnie
New Member
Cash: $ 0.20
Posts: 4
Joined: 28 Aug 2004
Location: Ohio
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I am looking for some investors or an Investor to help me get my 2nd company off the ground. I use to work as an Area Sales Manager over 3 states for a Bank. I started a company dealing with Foreclosure and working with Asset companies along with the Loss Mitigation Dept. and Lenders for my Clients. If I couldn't keep them in their home Iset up with a realtor found an Investor local and then strike the deal for purchase at .40 - .70 cent on the dollar. I get $1,000.00 for doing all the work.
I have noticed that the Investors are making a 20 - 40% return on their money and all I got was $1,000.00
yes they had to rehab the property but when I was in construction I still kept my contacts.
I was asked a few months ago why I choose not to do this fo myself.
Never thought about it.
I hired an attorney out of Kentucky put a business plan together, then I was told I needed a Letter of corporation for the L.L.C. then bi-laws as I brought 2 other people on board so I could still eat and pay the bills while working.
things are ready know but I need start up capital.
My e-mail address is Smithld@aol.com if you would like to talk or simply tell me what I should do in order to get this company rollin.
Thanks,
Lonnie
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Sat Aug 28, 2004 11:18 pm |
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REI Houston
Moderator
Cash: $ 5.60
Posts: 23
Joined: 16 Mar 2004
Location: Houston, TX
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It seems that you are what we call a "wholeseller" or "bird dog" in real estate investing.
Check with your government regulations to see if there is a conflict of interest; however, in Houston Texas a standard fee if 10% of the *profit* the rehabber expects to get.
For example: Take a $100k house, get it under contract for $50k. It needs $10k worth of rehab (and done correctly, $10k can do a lot).
Loan Amount
a. ARV is $100,000.00
Margin when mult by 65.00% $65,000.00
Estimated Closing Costs
Number of Points for Loan 3.00% $1,950.00
Estimate of other charges for
documents, closing fees &
expenses, and lender title
policy: 2% of Loan $1,300.00
Hazard Insurance Policy. $1,500.00
Other $0.00
Other $0.00
Total $4,750.00
Estimated Amount Available at Closing
Loan Amount $65,000.00
Soft 2nd Lien note
Total $65,000.00
Estimated Amount To complete Project
Purchase Price Submitted $50,000.00
Estimated Rehab Cost $10,000.00
Flip Fee $0.00
Estimated acquisition Expense $4,750.00
Holding Costs for 6 months @ 8.00%
Interest only till resold $433.33 $5,200.00
Estimated Closing on resale $0.00
Estimated Marketing $0.00
Error allowances at 5% $500.00
Agent Commission @ 0.00% $0.00
Total $70,450.00
Estimated ARV $100,000.00
Max allowable Offer $55,000.00
Project Cost $70,450.00
Project Margin $29,550.00
This shows the flip fee at $0 to figure the projected margin (i.e., profit). The rehabber is looking to make $29,550 off this. I would charge $2500-3000 for this deal. Put down the $500 in ernest money, get a preliminary title check and get paid when you assign the deal - not at close.
Hope this helps!
Jerel
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Fri Sep 03, 2004 10:19 pm |
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