Going to Closing!! JGREER First Buy and Hold!! KILLER DEAL!! PRICE REDUCTION!

Man that is great. keep it up!1

Congratulations! And thanks for sharing.

Lea
SPR Property Solutions, LLC

Awesome deal!! Way to work it with the bank!!
Keep us posted for when you close. We'll be here celebrating with you!!

Rina

Congratulations on your first buy and hold deal. That is great news. As you get a few of the buy and holds you may be able to generate more cash flow or equity to leverage for future properties and deals. Keep up the good work and continued success on all your future real estate deals. Believe and Achieve! - Joe

You have certainly acquired a great deal with minimal expenses. Congratulations on a job well done. You provided excellent resource information in you post. It is well said, that you live and learn everyday. Thanks for sharing your real estate story with all of us. You bring information that all can be successful in real estate. God Bless

Sandra

Good job! That's great news!

Awesome job! Very happy for you.

Cathy

Please forgive me for my stupidity- how did it become 49% of ROI?

Not a stupid question.

I should of actually posted it with as 49% COC ROI(Cash on Cash Return On Investment). I take my out of pocket expenses being my Down Payment of $5,000 plus about $2,000 of closing costs and add those together and thats $7,000 that I need to close on this deal with the bank and the seller.

After I subtract all of my Monthly operating expenses from my Gross income I end up with $290 of Monthly positive cashflow. Multiply by 12 and we get a total of Net income being $3480.

To determine ROI we divide our Net Income( the money we get to keep) by our total out of pocket expense to gain control of this property ( the money we were required to use to secure financing, closing costs, and inspection prior to closing on the deal).

$3,480/$7,000 = .497148% I am conservative so I won't round up to 50%.

Some people confuse ROI with Capitalization Rate. I do not like to use a Cap Rate to determine a property's value. Correct cap rate does not include debt service(mortgage payments) which therefore does not truly reflect the bottom line. The only way a cap rate is used to effectively analyze a property is if we buy a property with all cash and NEVER refinance and take that equity out of the property in the form of cash to purchase more property.

For example if I used all cash to buy and never refinance I would have a cap rate of about 25%. Seems like a good investement, right? Based on Cap rate it is deffinently a great investment especially when most investors look for a cap rate above 9%. But we can do much better.

If I spend $20K and I earn a return of $5K a year I have a Cap Rate of 25%

If I spend $7K and I earn a return of $3,480 a year I have an COC ROI of 50%.

If I can buy 2 more properties just like this one. I could then earn $10,440 a year from a $21K investment. Don't Forget about Phantom Income, Rental increase, Refinacning the property to create Infinite ROI, and property appreciation.

I hope I answered your question.

To everyone thanks for all of your comments I will keep you posted with photos of the property as well.

Hearing your statement just gave me even more courage and confidence in dealing with the banks. You keep up the good work.

Keep paving the path to success, someone has to make it smooth for me. LOL

JGREER that was a great find. I may ahve my first deal soon working real hard built my credit back have been preapproved have my first offer in!

Having your first buy and hold is a tremendous achievement. It's the start to financial independence. Passive income. The reason why we do this. Making money while we sleep. It's the ultimate financial goal.

Great numbers!!!!!! Great job!!!!!

Best of luck to you in the future.

David Lessing
"God works through people"

Good for you on acting on an unbelievable deal!
Thank you for sharing your knowledge.

Congratulations. And, thanks for your detailed explanation of the COC ROI!!

Keep up the good work. I will be watching and learning. I'm still waiting for my first deal. It will come

Congratulations! Thanks for the details. These detailed examples help me figure out deals (soon to be deals) of my own! Keep up the good work!

Nice work James....

Despite what a lot of people think, sometimes the smallest of deals can have the best margins for sure. I try to convey that to my clients that simply making a ton more money may not be more profitable. It may be more beneficial to actually do less, with a higher margin than pump out a ton more revenues with all the extra costs, employees, etc. that goes into it.

I think your REI deal is a perfect example of that!

Take care and good luck on number 2!

Good you initiated something..but I am still interested to know and maybe the rest of us what happen after that. The final deal to show how much you made and the marketing skill you have applied to finalize the deal ...dom

The CAP rate thing i did not know and showing how the numbers work better with Return on Investment than Cap rate investment,Thanks for sharing!
But without a doubt...The credit score part of your post shows"THIS IS BUSINESS",And great job of selling yourself/info to the bank on this deal.

(Saw your shirt in your picture.) That's great news. I like that about the bank not looking at credit score when you can show a good business plan, great job. Something to think about in the future. Good luck, God bless, and Semper Fi.

Fear Not,
Jeff

Hello Dom,

I don't totally understand what your question is aiming towards. I am waiting to close on this deal I made my post because 2 weeks ago I didn't think I was approvable for financing and I was not in the mind frame that I was going to own rental property yet. I know that the ultimate goal is to eventually own property, but fo myslef personally I hadn't fully accepted that... until I went out and asked a question and got the answer I did NOT expect.

If you can put alittle more detail in your question about how I initiated something and what ahppens after that I would gladly answer on the thread for everyone to read.

What do you mean in regard to the Final deal? I did state how much I made in my original post regarding my ROI. I will be holding on to this property for a minimum of 1 year and a day. Until then I do not know how much I will have made.

AS for Marketing I didn't really do any. THis property was FSBO on craigslist for 2 months and when we got to it, it had been listed with an agent for 1 month and already had 2 offers go south because the buyers could not get financing for some reason. My Marketing will be for tenants very soon. Bandit Signs work great for that!

For example were you asking about the initiation with the bank, the seller, or myself?

Let me know how I can best answer your question.

Great work on your first deal, there's more to come... I'm sure you reminded everyone how simple & easy it really is to get that first deal out of the way.

Keep reaching your goals in this manner.

Everyone Can Make A Difference!
John A.