Know the Players Involved in a Real Estate Transaction

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It has been an interesting day already. We have decided to drop the single family home and just buy the two duplexes. With 4 units, and the total contract price dropping significantly, we will still cash flow very well on this deal. But the interesting part came today, when I heard from my investor that the title company called, asking for release of earnest money on the single family home and the adjoining duplex. This came as a surprise because we are not even out of the option period on this contract. Luckily, my investor called me to ask me about before taking any action.

The escrow agent at the title company has an established relationship with the sellers, and handles all of their transactions. This is why you have to be very cautious when dealing in real estate. You can get stabbed in the back very quickly if you aren’t extremely careful. Question everything. They have no right to release earnest money until the option period expires, which isn’t for another 3 days. So today’s tip is, question everything, trust no one. This policy probably saved us over $3,000 today.

Until next time, sign up for my RSS feed to get automatic updates as this transaction progresses, and all other posts as they become available here at Personal Finance Resources.

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Turkey Day Real Estate Investments

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Working on potential real estate investments is totally fascinating, and finding deals that fit a profitable formula is both extremely challenging, and extremely rewarding. Currently, I am working on a deal with a local realtor who is also a real estate investor here in Belton/Temple TX. He is trying to get out of the property management business, and owns a number of properties in the area (maybe about a dozen properties).

These properties are single and multi-family homes, and are in different areas throughout town. He has a few problem properties in the Temple market, which are a risk to me and my investors, remembering that location is the most important factor in real estate. But overall, he has a good spread of properties, and I am interested in about 3 of those properties. One is a duplex located just across the street from a property I already own, and therefore I am totally convinced of the neighborhood and the ability for this property to produce.

All in all, I am looking to put two properties (which includes 5 rental units) under contract, with the attempt to achieve a total payment of around $1,100-1,200. These properties gross around $2,200-2,300 per month, which is really good money for the risk. So this is just as word of encouragement to y’all out there, as you can get into good deals, you just have to keep looking.

One point I will make, I found this guy just by checking the MLS for some multi-family properties for another potential client. I saw a good price on a duplex, good location, and knew it would cash flow. If you have a little time, drive the neighborhoods you want to do business in, and just look for some “For Sale” signs. Farm those markets, and find those deals. To make it big, you are going to have to do a little more than the next guy.

‘Til next time, sign up for my RSS feed, and get the updates as they happen on this project and more to come in the future.

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