$10 house - Posted by Bryant

Posted by Adam (Austin) on September 16, 2002 at 21:51:28:

I don’t understand. Where is the profit in this deal?

You’re probably going to need money to repain the inside and recarpet. And that money will use up any upfront money you receive.

And if you don’t have any positive cash flow, how do you prevent this scenario:

The t/b lives in the house for three years, but does not fix anything and then leaves the end of the three years. You then have to come out of pocket to fix the house (maybe a new roof?) … and if the market is still slow, it could sit vacant for four months.

Second scenario: You don’t find a tenant buyer, and the property sits vacant for four months. Then what?

I’m starting to realize that the “no equity” Subject To deals as described in the seminars really only work in a best-case-scenario hot market.

  • Adam.

$10 house - Posted by Bryant

Posted by Bryant on September 16, 2002 at 20:38:11:

I believe that I’ve posted here before on this house. I bought a 3BR/2BA/1712 sf house built in '95 last month subject to the existing financing balance of $153K and gave them a $10 earnest money deposit. The house is worth around $165K. Beautiful house, 2-car garage, RV space, has a deck in the back with a Koi pond with a waterfall, greenhouse, and garden area.

The payments are about $1507 PITI which is too high to make positive cash flow in the area. I’m going to be discussing with them refinancing there 8.4% loan at a lower rate. My agreement with them is to take over the loan November 2002.

My marketing is not producing the number of good quality buyers that I need nor the response rate. My ad says no bank qualifying, generous rent credit, etc.

This is my backup plan that I’d like someone to comment on. If I don’t find someone by October to either buy it or rent-to-own it, I want to do an open house. I plan on running an ad that says something to the effect of the following:

"$10,000 HOUSE
3BR/2BA/1712 Sq. Ft.
Built '95. 2-car garage, RV Space, deck, Koi pond.

Home inspection (date)
Home will be DEEDED to first to come with $10K and assume payments of $1509/month.

What do you think?