Posted by Chuck (AZ) on July 15, 2001 at 15:13:36:
First of congrats. I haven’t seen so many twists and turns in a deal in a long time… creative would be an understatement.
Now as to your problem… see paragraph above.
In short, your gonna have to get the lein holder to agree to release any homes that you sell… weather that’s for cash or on contract… and he’ll probably want the money… unless you can somehow make more on these’s than they’re worth.
Given your record for creativity… not impossible.
I haven’t played with the numbers on this deal yet (I’m afraid my calculator will blow up)… but it looks
like your making lunch money if your lucky.
I wouldn’t buy any new homes until you get some REAL cash-flow going… and your idea will work, up to a point. Meaning that time and money NOT spent doing repairs on rentals, will allow you the time and money to make improvements.
I got into real estate investing via Carleton Sheets. My friend gave me the course. I bought a park an hour away. 80 lots, 65 homes. The owner wanted $35,000.00 cash and assume 3 mortgages for 12 years at $9,700, $1,800, and $1,300 monthly. The banker also wanted me to assume an improvement loan @ $720.00 monthly. My credit was bad, and I didn’t have 35 grand. I got the seller to agree to 20,000 cash, and I borrowed 13,000 of that from a friend in exchange for a large interest in the park. Oh, for the remaining 15 grand, I agreed to pay the sellers last years of taxes (about 10,000). The seller also agreed to stay on as cosigner for 3 years, and the banks have agreed that if I keep the payments current, I can assume the note by myself in 3 years. 7 grand and bad credit- I’ll own it in 11 years from now, and it appraises at about 1.5 million. The rents total about 23,000, but with vacancies, movers, non-payers, etc… I probably bring in about 19 to 20 grand a month. Since last year, I’ve rehabbed 2 homes and bought 4 more for about 25,000, including expenses (electric, moving, gas lines plumbing…)
I want to turn it into a tenant-owned 55plus park. Every single home is park-owned. Right now I am not making anything at all in the way of profit- just working my butt off fixing things and trying to pay the bills and make improvements where I can afford it. Still working full time at my other job. I want to put in a small laundromat in one of the smaller homes, and wood fences between the rows. The tenants are lower-class, good people, but rent collection is a headache. My partner (the seller) down in Florida (the park is in Tennessee) has concerns about trying to sell the homes to tenants, since the homes are mortgaged with the land. Any- and I mean ANY- opinions, suggestions, criticisms, ideas, or whatever, are welcomed. I’m new to this site- I love it.
Thanks, Kenny
