OfflineYesterday I got a call from someone I met over a year ago. I was rehabbing a house directly across the street from his, and much to my surprise he saved my business card. Well he tried his hand at being a landlord and he was very disappointed, he lives 3 hrs away and it was more than you he wanted to mess with.
He called me to see if I would be interested in purchasing his house. I met with him Saturday afternoon and we came to a tentative agreement on the price of $27,500.00. The house as an AVR of $55,500.00. The house needs painting and clean up and THAT's it! It was rented for $950.00 but a more realistic rent is $850.00. I told him that I would call him back on Monday evening and give him my final decision.
Well this morning when I was looking at all my pictures and pricing how much I was going to spend on the repairs a thought came to me, Would he be interested in financing it for no more than 5 years. He didn't sound like he needed the money and the house is free and clear, so I figured what the heck call him. And I did, much to my surprise he spoke to his wife while on the phone and said yes, but no more than 5 years. He told me to put some numbers together and shoot them over so they can review them.
So here is where I need your help, what would be a reasonable offer with respect to down payment, Interest and monthly payment. Should I have a balloon payment at the end of the 5 years? So please send over all the suggestion that are out there. I will be getting back to him by end of business day tomorrow.
Thank you all.
Gene.
"It's not what happens to you that determines how far you will go in life,
it is how you handle what happens to you.
Zig Zigler
If you would like to see the pictures let me know and I'll try to post the link.
"It's not what happens to you that determines how far you will go in life,
it is how you handle what happens to you.
Zig Zigler
just set up the owner financing for the 5 yrs with 4% interest, you will still have cash flow and he will be paid off completely from the rents. You will own it free and clear. OR,,,I will give you $5,000 and you can flip this deal to me. Rando1
Rando
You have a great deal on your hands. You also have a NICE problem. You have to decide if you want monthly income or would you like to have a lump sum of cash. What a nice decision to have to make. You win either way.
Keep up the good word. You are doing well.
Roy Voeks
Official RE Coach
SO many positives here!
The power of business cards!
Asking the current landlord to owner finance, based on a 'thought that came to you' (I am smiling from ear to ear ... would that thought ever have crossed your mind if you were not a 'Graziosian"?)
Rando has given you really great advice. My advice to you is: do not to wholesale this deal to Rando for $5K (Nice try Rando!)
Good Luck, keep us posted! Rooting for you!
Angela
P.S. If you change your mind and decide to wholesale this deal, I will give you $5001
you have struck gold. My suggestion, assuming you want to keep it, would be to pay interest only for 5 years and then have a balloon payment OR have a 360 amort schedule with a balloon in 5 years. Either way you will have positive cash flow. However, if you want to flip the house, consider making the first mortgage an assumable one or buy it in an LLC so you can sell the LLC. Too many other possibilities to write about here but you've got a good one. Congrats!!
Always Looking to Acquire Houses | Always Looking to Amaze Investors
Alright!!
I met with the owner after he made his 3.5 hr. drive and he was ready to do business. After some chat to build report I asked him if he had given any more thought to my financing request. Much to my surprise he was right in the ballpark where I wanted him to be. He was willing to go the 5 years at 5% interest with a balloon payment after the first years of 50% of the balance and do a $500.00 per month payment for the 5 years. With only a $1,000.00 down payment.
After sharing with him the comps that I had pulled, the rental report for the area and the list of things that I felt would have to be repaired before renting or selling, I told him that in order for it to cash flow I really couldn’t do that.
So I offered a $2,500.00 down payment so that he could pay his part of the closing cost and still walk away with a bit of money with a 5years term at 4.5% with a balloon of the balance at the fifth year, with a monthly payment of $300.00 to start 60 days after the closing date.
After about five minutes of thinking about it and a few questions in between he accepted my offer. I drew up the contract and we both signed it and he handed me the keys and said if there is any problems just call me. These are his exact words “I don’t want to have to come up here for anything other than the closing. I wish you all the luck”.
He picked up all his things and got in his car and went back to Ft. Pierce, Fl.
When I took the paper work to my lawyer, who is also and investor, he told me that he would buy it if I decided to sell it because he was looking for another rental for his portfolio.
This has opened up a whole new strategy for me because now I can do pretty much anything I want with this house. Fix it and hold it, sell it “Owner finance”, flip it as is, and much more. The house would make a great rental especially being my very first rental property.
The next couple of weeks will determine what I will do. I’m going to explore a couple of quick cash strategies. I will post later what happens.
See you soon.
Gene.
"It's not what happens to you that determines how far you will go in life,
it is how you handle what happens to you.
Zig Zigler
Have you stopped doing your happy dance yet?
Karen
"You're never too old to be what you were meant to be!"
www.deangraziosi.com/real-estate-forums/investing-journals/59128/day-for...
"Shining Like a Star & Dancing on Sunshine"
"Shoot for the moon! Even if you fall short, you'll still land among the stars!"
...is right. I hope I start doing owner financing shortly.
We should all have your problem.
Right on.
Do it again!
Tina
Never, Never, Never Quit, N3Q
"Nothing happens until you place an offer."
"Skip Deal #1, go straight to Deal #2; it's so much easier."
"There is nothing so useless as doing efficiently that which should not be done at all." — Peter F. Drucker... so, "Don't sweat the small stuff." -R.Carlson. "The greatest mistake you can make in life is to be continually fearing you will make one."~E.Hubbard, The Note Book, 1927...so, Do it for the right reason and "Do it with a headache!" - Dean Graziosi, Weekly Wisdom #176
love your deal!!! this deal reflects DG's teachings all the way! and all because you ASKED!!!
now go celebrate! ... oh yes, and find a tenant for your new property!
Valerie
“And will you succeed? Yes indeed, yes indeed! Ninety-eight and three-quarters percent guaranteed!” ― Dr. Seuss
"I believe in angels, the kind that heaven sends; I am surrounded by angels, but I call them friends" - Unknown
My journal: http://www.deangraziosi.com/real-estate-forums/investing-journals/59110/...
Congratulations!
Angela
please tell me your contract has "and or assigns".
that said great deal and congratulations.
keep moving forward, rob
whether you think you can or you think you can't, you're right.- Henry Ford
keep moving forward, rob
Absolutely Rob all of my contracts have that on it right after my business name. I wouldn't leave home with out it.
Hey wanted to take this moment and thank all of you for the encouraging words. I really appreciate it.
I have decided to rent this home, the deal is to sweet to do anything different. At least I'll have about $250.00 in positive cash flow. I can do that with a very minimal initial cost to get it ready, mainly cleaning some paint touch up. OH OH as I was cleaning out a storage shed on the property that the owner did not have the key and never broke the lock I found a ton of goodies. Fairly new hand tool boxes, 3 really nice multimeter, 1 fairly amp meter, and a bunch more. Ebay auctions here I come..
Have a great day.
Gene.
"It's not what happens to you that determines how far you will go in life,
it is how you handle what happens to you.
Zig Zigler
Congratulations on your deal! That's inspiring! You planted the seed a year ago by giving out your business card and are now seeing the fruits of your labor. Way to go!
Fish
http://www.lvlinvestmentstx.usapropertywholesale.com - Dean's free website
http://www.fishbuyshouses.com - Company website
I want to put in a plug for Eugene. He has been someone who has been diligent and is always looking for a deal. I have had the pleasure of working with him on the phone. He is always pleasent and always alert for a way to make a deal happen. He is an example of hard work, dedication and being aware of what is around him.
Great job, Eugene!
Roy Voeks
Official RE Coach
Thanks Roy I appreciate all your help.
Look forward to working with you.
Gene.
"It's not what happens to you that determines how far you will go in life,
it is how you handle what happens to you.
Zig Zigler
Hi what a deal, isnt life awesome, many thanks, Jim
jbischoff
what a great story it's so good to hear about the details really happy for you and thanks for sharing.
We closed on this property this past Tuesday and we started to do the repairs and painting on Wednesday. We should have it ready to put it on the rental market in about 2 weeks. We have already started to receive calls from prospective tenants.
I’ve decided to rent it for a year or two to let the market come back a bit then try to sell it. Mean time the rent will more than cover my monthly expenses. The way I have this structured it will be paid off in 5 years then the rental payments, if I decide to keep it that long, will be a nice cash flow property.
Time will tell what happens but that’s my plan for right now. I’m calculating that my repairs and full painting will not exceed over $3,500.00.
Monthly Cash Flow break down:
Rent 850.00
Taxes 135.00
Ins. 55.00
Pyt. 466.00
Maint. 60.00
Balance 134.00
I’m telling everyone that the rent we asking is $900.00 but I will settle on 850.00. this particular area average rents for my size home is $950.00 but I will go the 850.00 to see if I can get a long term tenant.
I’ll be updating this as it progresses.
Thanks,
Gene.
"It's not what happens to you that determines how far you will go in life,
it is how you handle what happens to you.
Zig Zigler