Frequently Asked Questions
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Effortless Home Buyers is a real estate solutions company. We are a group real estate investors that are looking for properties to buy. Our first and foremost goal is to purchase your property as investors- offering cash, quick closings, and no commissions. If selling to an owner occupant is the best route for your specific scenario, we have a team of premier real estate agents on our staff to help structure a comprehensive listing strategy. It is our goal to offer you the best possible route for you to sell your property.
In the United States, when you own a property, your tax mailing address is public record. This is incase the municipality or creditors need to contact you. So at Effortless Home Buyers, we go to the county tax accessors records and check each property to find contact information.
What we found is that if we go through real estate agents, that is additional fees that can be saved for the company and for the seller. So we go direct via email, phone call, or snail mail so that we can save you around that 6% of the transaction.
There are things that we can find from public records such as the address, the front of the property, but we need help from the seller to complete what we need. Information such as
1. Number of bedrooms the property has
2. How many bathrooms?
3. Rough number for square footage
4. Are any repairs needed?
5. Has the kitchen/bathroom been updated in the last 5 years?
6. How are the mechanicals of the property?
7. How is the electrical? Is it up to code?
8. Is the plumbing updated? This call usually takes from 10 to 15 minutes and it is unintrusive. With the information, we can create a proper offer for the property.
After the initial phone consultation where we receive information from the seller such as bedroom and bathroom count, square footage, types of repairs needed for the home, and other pertinent details, our underwriting team would then scour the market to find sold comparables. These are properties similar to what you are selling which has been sold in the last few months. Once all the information is complete, we will craft several offers for you.
This isn't literally we are bringing physical cash bills onto the table. It means we are purchasing the property without a loan.
This is the second of the 5 offers we make to sellers. This is closing without any type of loan or loan contingency. We will also purchase it AS-IS. The main difference is that we need more time. It would take 45 to 60 days so we can find better investors.
The third of the five offers we make is called the price lift offer. So, what exactly is this? In certain situations, sellers can't accept cash or cash plus offers because it doesn't take care of their financial needs. With a price lift offer, we establish a partnership between ourselves and the seller. We will basically come in as a partner to rehab the property and then sell it on the open market. All the profit is then split between us and the seller.
This is the fourth of the five offers we can make to sellers. In some cases, our previous offers may not make sense based on the timeline goals of the seller. But if the seller is willing to be our bank, then we will be able to make a higher offer because the interest rates we would normally pay to an investor is mitigated.
There are a lot of reasons for that. For example, investors such as us can move faster. We can close on a property within 15 to 30 days. The retail sale route can take so much more time. Another reason is the fact that we buy as-is, where-is. We are taking it in the condition that it's in; you don't even have to clean it out!
While we have several types of offers we can make, there are cases wherein they do not fit the situation. If the property is in good condition and no repair is needed, then this is a good time to list it because you get the maximum amount of value. But it does have some downsides such as taking a lot of time, getting offers with contingencies, and more.
As with anything else, there are pros and cons to selling to an investor. One of which is that the price would be lower because investors need to make a living so they bake a profit margin into the offer. Another downside is that things can move really quickly which can be a problem for those who need some time to think about things.
Not long, really. But it depends on how complete the information the investor gets. Usually, they can close in 15 to 30 days upon initial contact. But delays such as if we don't have enough details, what repairs are needed, and the inability for us to get into the property can prolong the process.
This is a great question. This is an area for real estate transactions that have become complicated over the years. There are charges that you just see without knowing what it's for. These are usually handled by lawyers, but it's worth knowing. Let's break it down and understand the closing costs in this video.
Typically this is split evenly between the buyer and the seller especially if it's a retail transaction. But when you work with an investor, that changes. Usually, investors pay all the closing costs.
When you've spoken with an investor, provide them with all the information, they've seen the property, and they have provided you with a verbal offer. What happens next? I take you through this process quickly in the video so you understand what happens and what to expect.
Understanding the overall process when selling to an investor takes several steps. It begins with a call or a visit to the website of https://www.effortlesshomebuyers.com/ Next is you get to talk with a purchase manager who gathers all the information about the property and the seller's goals. The investor then gets access to the property to verify the information to make estimates. An offer can be made which the seller can accept, negotiate, or reject.
When the investor speaks with the seller and asks for what repairs are needed, usually the sellers only say that the property is in great condition and may not be aware of what needs to be done. A property condition assessment is where we ask for permission to come into the property for about an hour or an hour and a half. They will then start taking photos and videos of the property in order to take note of what needs to be done.
At that point, a few different things happen at the same time. The investor would start processing the closing. The investor may line up contractors for rehabilitation. There may be tasks with the municipality that needs to be arranged such as water reading and such.
There are a few different ways.
The easiest way is to use a digital signing service.
The document will be emailed and it will have marks of what you need to fill up and sign. Another way is to print out the document then physically sign with a pen. Scan this and then send it back. Then, of course, we can use snail mail to send the contract where you sign it and send it back to us.
This is a payment made to the seller by the buyer to signify that they are fully intended to close on the property. If the buyer doesn't close, the seller gets to keep the money for the time and effort already done. It shows good faith basically.
In most states, when a contract is signed there is a period of days after where attorneys of the seller and buyer can review and choose to modify other details of the contract except for the price. The attorney from either party can still accept, reject, or modify certain things.
This is any type of clause in the contract that states that either the buyer or the seller can get out of the contract without losing earnest money if there is something not of their satisfaction. An example would be an inspection contingency, especially with properties that need work done on them. Professionals would be brought in to check how much would be needed to fix everything up. If the price is more than what the buyer anticipated or the seller-provided, then the buyer can get out of the contract without losing earnest money.
When a buyer and seller wants to deal in a real estate transaction. It is common for a buyer to sign before checking the property. What they'd want is to bring in professionals to evaluate the property and see how much it will take to fix the property. The inspection period is to provide time to do the evaluation and create a report. It usually lasts from 5 to 10 days in most cases.
That's a great question. And one of the reasons why people come to EffortlessHomeBuyers.com is because they have time constraints due to other factors such as they purchased a new home and they are now paying two mortgages. In this type of situation, the seller needs a time-sensitive offer. With that, banks are slow. With investors, it can be done faster and easier.
You may have heard this term from other real estate investors. The term actually originated way back with loan sharks and it's become more mainstream. Basically why it's called a hard money loan is because it is based on the hard asset, not on the borrower itself.
When a seller comes to us and asks us how long will it take us to close, we answer that we can usually close really fast but we have to make sure that the title comes back clean. What that means is before we buy the money, we need to make sure that the seller owns the property and has the right to sell it. This is where the title comes in.
As real estate investors, we need to make sure that we make money from the properties we get into. This basically refers to the price that we can sell the property AFTER we make repairs and make it look brand new. If a property can be sold for $200,000, which is after it's been repaired and based on my due diligence (ARV, it takes $50,000 to accomplish those repairs. Next, we'll subtract the repair cost, holding costs, profit, overhead, and all other costs, and that's how we get to the offer.
Because this is a business, we need to make sure that we make money based on the offer we give. The first thing is we look into sold comparables in the area which are similar to the property sold in the past three to six months. Next, we will backtrack the cost of repairs, holding costs, etc. Then we will look at the needs of the seller and how we can best help with that such as if they need immediate cash or maybe even a partnership. We use all of these things to make 4 to 5 different offers for the seller to choose from.
There are different departments in Effortless Home Buyers and it follows the seller coming into the company until they leave with hopefully a check in their hand. First is the marketing department which looks for and contacts sellers. Once a seller is interested, they are working with the lead management department which intakes all the calls and pushes the sellers to the right people such as the realtor department or acquisition department. The acquisition department does the estimates. The underwriting department does the research during this process. Then the transaction coordinating department takes care of everything needed to actually close the deal. The customer success department would then contact the seller for feedback after everything is done. Investor relations department work at the backend to ensure everything is provided.
The overall timeline when selling to Effortless Home Buyers can usually be tailored to fit your needs as long as there is enough time on both sides. The typical timeline can be 15 to 30 days and in some situations reach up to 45 days depending on how the information is gathered.
It all started when Fernando Angelucci read Rich Dad, Poor Dad and he got involved in real estate in 2013. He started to learn what he needed. In 2015 it started to catch momentum with more investors and marketing.
We usually focus on residential spaces such as small condos, single-family homes, townhouses, small multi-family properties, and even mix-use. 70% of properties that go through our funnels are single-family homes around Chicago.
The main pro is speed and convenience. You don't get any contingencies in the contract. It can be closed from 15 to 30 days starting on the day the purchase agreement is signed, and we are going to take care of everything for you. This is great for those who just wants to get rid of the property and get the money. The main cons is first, it would be the lowest offer we can make because of all the additional cost and coordinating in a short timeline.
This is one of the five offers we provide sellers. The main difference between cash offers and cash+ is because you get more money. The reason for this is we ask for more relaxed terms. With that extended time, we can shop around for investors some more which can save a lot of money and is passed on to the seller.
The price lift offer is one of five offers we can provide sellers. This is great for two separate types of people. First are sellers who have a bit of extra time on their hands. It is also good for sellers who want to learn to be a real estate investor. Basically, we make a partnership. We show you how we rehab it, market it, line up the financing, and the entire process to resell it. At the end of the process, we will split the proceeds on top of the original offer.
This is one of the five offers we can provide sellers when they come into Effortless Home Buyers. One of the biggest pros is that you can take equity over time. This allows you to get a much higher price and spread out capital gains and depreciation. It also creates an income stream by becoming the bank. You make money and interest. This is great for those who do not have a tight deadline. The main con is that this is a longer-term strategy. While you don't get a lot of money upfront, you get a much higher price over time.
Listing a property is one of the five offers we can make to sellers who are looking for a solution to their real estate problem. This provides the highest price. However, there is a lot more red tape.
This is very rare but there are instances where it does happen. One of the biggest reasons for this is because we were given information that was misrepresented. For example, we pull the title and it's actually under a partnership and the other party was not aware of the deal.
This is part of how we purchase properties and how we partner with investors. Usually, loans are from private investors and not banks. Before they do that, they want to make sure that what they are funding is accurate. They would want to do a walkthrough, understand the repairs, and physically get information for them. It's basically part of good due diligence on the investor's part.
The answer is both yes and no. We can make an offer in as it's called "sight on seen". Using technology, we can see it through Google Maps and look up other information online. But in this scenario, we need to rely on the seller. For example, they may think that the kitchen is good to go but when a professional take a look, it would take money to fix it up.
Closing may seem like it's a finite event, but really it is a process. A lot of things are done ahead of time especially if it's a remote closing. What you can expect is to meet with a title company or office of an attorney who will walk you through every document and explain everything. This can take 30 to 60 minutes.
The answer is no, but it is highly recommended. They are there to provide you knowledge because they do these transactions day in day out. While you don't legally need one, it is best to have a real estate attorney to cover all the bases.
This depends on the state. In Illinois, this is a tenant accepted state. What this means is regardless if the property changes hands, if there is a lease, it supersedes the sale. So for example, if the tenant has 6 months left on the lease when the property is sold, they have the legal right to stay.
The answer is no. And usually, investors prefer you don't do any rehab for that matter because they have a large network of contractors with pre-negotiated prices for volume work.
An As-Is Offer is exactly as it sounds. It means we will buy the property in AS-IS condition. We will not ask you to paint the house, make repairs, or even clean up. We will handle all of that.
The answer is yes. We are very familiar with the process. This is when someone passes away and their estate is not properly planned. The state will step in and make sure that the public is aware because that person may owe someone. The probate process can take a lot of time and it is very emotional This is one of the things we have excelled in the area.
This is actually one of the main types of properties bought by Effortless Home Buyers.
A distressed property is usually not fit to be listed on the market. Basically abandoned properties, those that need huge rehab work, lots of damage, or simply unlivable.
The answer is yes! Especially if it's a rental property.
We have multiple exit strategies with this. We can buy and sell, buy and rent, or even rent to own schemes. This is why we can buy properties in almost any condition.
The answer is yes! A pre-foreclosure property is when a seller stops paying their mortgage, the bank would sell the property on an auction if this is not fixed by the seller within a designated time frame.
This is a real estate lingo. What it means is we buy a property, we do all the work to fix it and sometimes even improve it. We take care of everything and then we list it to find a new homeowner to sell to.
This is another real estate investor lingo. This is exactly what it sounds like. You buy a property then hold it as a rental to collect a monthly cashflow. Buying and holding is the best way to build wealth. The monthly income helps scale businesses.
A foreclosure is a one-time event where a property is sold at an auction to the highest bidder to pay the bank back for the loan that is on it. Every point from the mortgage payment is missed until the auction, which is known as pre-foreclosure. This can happen due to many reasons. The important thing is to act quickly because a timer starts to tick.
A lien is a creditor placing judgment on a property. A mortgage is an example of a lien. When you don't pay taxes, a tax lien is placed on the property. Now the option is to sell it and use the proceeds to pay off the lien.
An encumbrance is something that is placed on the title of the property which says the property cannot be sold until it is removed. It can be a mortgage for example or a mechanics lien or property taxes.
That's a good question. And the answer is yes. It can happen before or at closing. Basically, the property cannot be transferred to a new owner until the encumbrance is removed or satisfied.
This is placed by a contractor who did work on a home and is not paid. It states this seller is unable to sell the property until my debts are paid.
When a buyer is going to purchase a property from a seller, both parties should legally be able to do that. So a title company can look into the chain of titles to look at everyone who has ever bought and sold the property to make sure all is legal. This is basically proving that the seller has the ability to sell that property.
Market value is a familiar term in real estate but there is more than it meets the eye. Market value is the worth of the property on the market, seems easy to understand right? But the question is, “what is your market?”. Remember, a property is only worth what it will sell for. Looking at other listings of properties won’t actually give an actual depiction of what your market value is.
The discount to market value that investors are looking for is dependent on an investor to investor basis. Some institutional investors may only need a small discount to market values because they are buying it in a big volume. It’s not just what the property is worth with the discount to it. Investors will also look at what is the discount after the repair value because the market value of a property in its current condition could be different after it’s been repaired.
This question has a lot of different factors. For instance, every investor has different values that they are trying to reach in terms of the return of investment. When a fix and flipper is doing many projects per year, they may be able to accept lower profit returns because they are hitting their mark so many times per year. While there are some who are doing one or two projects per year, they may be looking for a much higher return of investment because they have to make their entire income on those two projects.
A fix and flip usually take two or three months to a year, depending on how much work a property needs.
Not only is there the closing of the property which some investors can do quickly; usually faster than a retail buyer or someone who is using a real estate agent. There is also the time needed for the title agent to get everything coordinated with closing.
After getting permits and approval, we also need to get subcontractors. Then we can start the actual rehab.
Rehab can take two weeks if it is just a simple cosmetic turnover rehab. If there is much to be done then it may take 30 to 90 days to complete. It is also possible to take longer than that depending on the situation. Nevertheless, the more skilled the fix and flipper is, the shorter the rehab will take.
Once the rehab is done, then comes the marketing. This all depends on the kind of market.
Some fix and flipper use staging, this is when you put accents and decorations to help buyers see the potential of the property. Though in some markets they would want to see the property empty so as not to influence their decision in buying.
If there is a buyer and it locks up the property as soon as it is listed. It usually takes 30 to 45 days for a bank to issue a standard mortgage to an owner-occupant, even if they are pre-approved. The new owner would also want to do inspections, have it appraised and the banks needed to have all this information.
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