The ultimate in the FAST FLIP

The first thing you need in order to do complete a nonstandard flip is an AWESOME real estate lawyer! It seems like ours never heard of a deal he couldn’t close! When Beatriz called and told him that we had a simultaneous flip, he was interested. When she told him we had to do it in seven days, he didn’t even clear his throat. He just said something like, ‘OK, so tell me, how can I help?’

This all started when we got a call from a man who sounded distressed. He had gotten a letter from us the week before warning him that he was losing his home. Actually, the letter told him, the bank had already foreclosed and set his home up for the next auction. Beatriz spoke to the owner and learned that, before he got her letter, he did not realize he had lost his home. She told him we could help. How? She went on to tell him that we would make sure he wouldn’t be thrown out, left with no credit, nowhere to go, and no means to start again. He was listening.

Beatriz spoke to him for a while. Once it became clear that he had seven days before his home would land on the block, we knew we needed information fast. To this end, there were some questions we needed answered:

Was his name on the deed to the house? Yes.

Did the financial company listed in the Auction Notice have the only lien on the deed. Yes.

How much did he owe? (In other words, could we afford it?) Once again, Yes.

Was he was willing to listen and work quickly? Yes!

So, now it was time to get serious. Beatriz told him that we needed to come by and see the inside of the house.

When? he asked.

Right now. she answered.

Their house was 40 minutes away. We got there in 20.

We walked up the brick stairs to the door of the old asbestos sided house and knocked. We were greeted at the door by a woman in her 40’s. When we entered, we saw that the rooms looked worn but neat. There were oak floors throughout the house. They were sturdy in most places, spongy in some, and, in others, it was so warped that it was downright dangerous. The walls were undamaged but filthy due to time, neglect, and cigarette smoke. The kitchen was small and greasy, but the appliances worked. So, all in all, another family could comfortably live there as-is.

We went into all rooms but one. She told us that they had a handicapped daughter sleeping there, so we stayed quiet and went back to the living room to sit down and talk.

We told her how we could help. Instead of being kicked out on the streets next week, we’d pay off their debt, give them extra time to move out, and provide the money they’d need to start again. They’d have to clean up and eventually move out, but they’d have a couple of weeks to do it.

The next step: writing the contracts. That’s the boring part of our business, so of course, it’s my job.

When we spoke to the wife about signing the contract, she told us that her husband wasn’t there during the day; he worked in a nearby grocery store as a butcher in the meat department, so we agreed to meet with him at work during his lunch and come by the house later on to sign with her.

The meeting with him was awkward. We have a Pathfinder. We figured that it was large enough to serve as an office, so we decided to meet him in the parking lot and sign the documents there. It never occurred to us that he would be hesitant to jump in the back seat of a car he’d never seen with people he’d never met. He was a giant of a man, but he stayed a safe distance from the car and kept peering suspiciously inside the open door while we talked. He rubbed his hands in his blood-stained apron while we tried to cajole him to enter the car. Finally, I walked around the car and sat in the back seat on the passenger’s side and waited for him to overcome is timidity and sit on down on the driver’s side. As I said, he was a large man, so when he finally sat down in the back seat, the whole car leaned his way.

I put the center armrest down and brought out the contracts. He relaxed after a while, and everything went smoothly. After talking to him in the car, I realized that he was a good man; he just had more responsibilities than he could meet with his paycheck and handling of finances.

Beatriz and I went back to his house to get the required signatures from his wife. When we got there, she met us as before: sweet and friendly. This time, as we entered the living room, she introduced us to a shy girl in her twenties who was sitting on a couch with blankets all around her. She was very sweet and simple and handicapped. When Beatriz saw that they would need more money than we anticipated, she told the mother that we would increase the money we agreed to pay her. I have to admit that I subtracted that from our profit and gulped, but, to my credit, when she looked at me, I smiled and let her know that we wanted to help.

Too bad we no longer had the money to buy the place, but that was a problem we had faced and overcame several times in the past. As long as we had a prospective buyer, there was no reason for concern.

But this one was different.

Why might it be any different? Well, unlike before, this time we didn’t actually have a buyer. Well, we kind of had a buyer; just not one under contract, and we needed a buyer to finance us!

He didn’t work out.

We had seven days, no, only six, then five. Time ticked by with no buyer. And then, with four days to spare, Beatriz found one. And not just any buyer! This guy was enthusiastic about a quick deal, and, best of all, he had cash in hand! That’s right, Cash!

And that was what sunk the deal.

You see, our lawyer requires that all transactions be conducted via wire transfers. Cash is not accepted.

I was aware of this fact, but it’s impact on a sale never really hit home to me until that night. Here we were, standing in the dark in front of the house with a buyer. He could hand us more cash than I could make in five years, but in the end, we realized that all we could do was to shake hands, sigh deeply, and go home.

And we only had three days left before auction.

The next day we got a call. Apparently, the cash buyer had a cousin who had a friend who had a cousin (or something like that) , and this cousin was looking for a house. Beatriz spoke to him and decided that he was genuine. He was young, with a wife and kids, and this house, though not in great condition, was just right for his small family. He could afford it, and his family could live there while he made the necessary renovations.

As a buyer, he was perfect! Except for one thing:

He didn’t have the money.

I mean, he had some of it, just not all of it. Truth be told, he actually had very little money.

But does that kill a deal? Not with my Beatriz!

You see he had three things that were necessary: Some of the money, eagerness, and contacts.

He and Beatriz had a heart-to-heart conversation. Like our lawyer, she believes in solutions, and we needed one now. He told her that he could raise the money . . in two days. So, he started calling. A cousin (not our first buyer) would lend him some, another relative could spare some more – not much, but some more. A friend, another friend . . . I have no idea how many people got involved with this, but he came up with a lot of money with one day to go!

Unfortunately, a lot of money does not mean all of the money.

He was $10,000 short. Ten lousy flippin’ thousand short! He was panicked. That was it – there were no more family members, no more contacts. The closing was only one day before the auction. he needed it all by tomorrow. And that was cutting it close!

While we were playing a shell game with buyers and their investors, there was a lot going on at the firm. Our lawyer is one of the hardest working men I’ve ever known. He must have hired a staff who were just as dedicated as he. After the closing, we learned that the paralegals were putting in overtime to get a month’s worth of work done in seven days.

It looked like everything was going to come together just in time.

Then we got word that the financer – who wanted to take this house to auction – managed to pull the default date up by one day! He managed to cut us off by 24 hours!

We no longer had one more full day to get the money together. The closing would be tomorrow at one o’clock, and it was 5:00 when the lawyer’s office called and told us about it. That gave our friend 18 hours – most of that would be over night – to raise the last ten grand.

The next morning the buyer told us that he found two more people to raise the final $10,000.

We were back in business!

We still had 4 – 5 hours before closing and a few more hours after that before the bank would default. Talk about close! All we had to do now was to wait for the money to transfer to the firm and we would be set. Finally!

Unfortunately, that takes the one thing we had little of – time.

We all gathered in the Lawyer’s conference room. Our buyer was at one side of the table and the sellers were at the other. The lawyer sat at the head of the table, and we sat beside the sellers. We waited for the wire transfer to come over. Then we got a message. No, not the one to confirm the transfer. This one informed us that the financer managed to move the deadline up by two hours.

It was over – He had won!

However, over or not, no one left the table. It was still possible to get these transfers confirmed and the transfer sent to the financer in time. Unlikely, but possible. Our nervous homeowner was sweating – the perspiration built up on his forehead. His wife rubbed his back soothingly. Around the table, fingers tapped. Poor humor and bad jokes bounced back and forth across the table like a flattened ball. For the most part, the only two points of interest seemed to be the table and the ceiling. It was possible . Highly unlikely, but possible. If the transfer got to the firm in time . . . if it cleared. Then –

BOOM! The money transferred! WE MADE IT!

Well, not quite.

The money transferred to us, but it would never transfer to the financer in time. He won.

It was close . . . so close.

And it owuld have ended there, but only if we had a different lawyer. If it were humanly possible, ours always closed.

And that’s how he did it. He told two paralegals to hop in a car with a certified check in hand, drive to the S.O.B’ office and hand it to him before the proverbial clock struck 12.

Time moved like a football thrown for a Hail Mary in agonizingly slow motion.

I don’t know the details after that, I just know that they made it. I don’t know how many minutes they had to spare, but we got the call: They made it in time.

WE WON!

We all cheered. The attorney was all smiles as he got a folder out and began passing the pages around for us to sign or initial. As each went around, he gave the requisite explanations.

After the first transaction was closed, we shook hands with the seller. We went over the details of his moving and our subsequent payment to him. He and his wife were teary-eyed. They were not foreclosed on, they had time to move, and they had enough money to start again. Beatriz spilled a few tears herself.

I just mourned our loss of profit.

OK, just kidding, I was as caught up in the moment as the others.

Once our sellers left, there were still our buyers – a young man and his wife at the table. When the closing attorney returned to his seat, we sat back down to sign and initial the next set of pages being circulated around the table. Once again, the lawyer gave the same explanations: only the names and numbers had changed. When we finally handed the attorney the last sheet, we let out a collective sigh of relief. Smiles seemed to brighten the room; laughter, handshakes and hugs filled the air. Our buyer and his wife went out to the waiting room. They held up the keys to their new house so that their kids could see that their life had just improved! More smiles! More laughter!

Beatriz and I waited for the closing attorney to come back with the news that the last transfer had been completed and our money hit the bank. We shook the closing attorney’s hand and and went home.

And that’s how we made a complete flip, without having any money and without leaving the conference table.

And we did it in seven days.