DEAL IN THE MAKINGS - Posted by SHENESA

Real Estate Investing Real Estate Gurus
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Posted by M.T. on November 09, 1999 at 08:35:24:

shenesa,
One thing that you might ask for in your offer regarding the lease option is a balloon in 2-3 years, he is more likely to go for this offer because as you stated he needs to be rid of the property in 2 years. When asking for this include a great % of the rent be credited towards the purchase price, since he is obviosly a motivated seller he may do it, bottom line…it doesn’t hurt to ask.
Hard Money Lenders are a good resource to aquire, they loan money at about 50-60% of value, then ask him to carry paper on the rest…he may want a balloon in 5 years, who knows…ask, ask , ask!!! try CS multiple offer technique, to me it was his most important tool he offers.
hope this helps and good luck, e-mail me for help
Mny4Meee@aol.com

Todd

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DEAL IN THE MAKINGS - Posted by SHENESA

Posted by SHENESA on November 08, 1999 at 14:31:37:

HELLOE FELLOW INVESTORS!

I AM NEW TO THIS WORLD OF INVESTING AND I NEED YOUR ADVICE ON HOW TO HANDLE THE DEAL I AM ABOUT TO VENTURE IN.

I CAME ACROSS A LANDLORD IN MY NEIGHBORHOOD WHO WANTS TO GET RID OF TWO OF HIS PROPERTIES. ONE IS A THREE FAMILY HOUSE WHICH RENTS FOR $450 FOR TWO UPSTAIRS AND $400 FOR THE BASEMENT APT, ALL ARE RENTED AND USUALLY THE VACANCY TIME FOR THE APTS. ARE LOW. THE OTHER HOME I BELIEVE IS A TWO FAMILY WHICH RENTS FOR $500 I BELIEVE.

THE SITUATION IS THAT THE OWNER IS LEAVING THE AREA IN TWO YEARS AND HE WANTS TO SELL OFF THE INVESTMENT PROPERTIES. THE THREE FAMILY HOUSE HAS A MORTGAGE OF $64,000 AND HE IS SELLING IT FOR $65,000. IT WAS UP TO $76,000. THE OTHER I AM NOT SURE WHAT HE OWES ON IT BUT HE IS SELLING IT FOR $51,000. HE CLEARLY STATED THAT HE IS NOT WANTING TO MAKE MONEY FROM IT HE JUST NEEDS TO SELL. I ASKED THE REALTOR IF HIS MORTGAGE WAS ASSUMABLE AND IF NOT WOULD THE OWNER BE INTERESTED IN A L/O WITH TERMS OF 10 YEARS AT A 9% RATE WITH PAYMENTS OF $650.00 A MONTH FOR THE THREE FAMILY UNIT. I WOULD USE THE TENANTS SECURITY FOR THE DOWN PAYMENT AND IF NEED BE HE PAYS THE CLOSING COST. IS THIS CREATIVE OR CAN I DO MORE WITH THIS DEAL.

THANKS
NEWBIE

IS THERE A BETTER WAY

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Re: DEAL IN THE MAKINGS - Posted by PaulF (OKC)

Posted by PaulF (OKC) on November 11, 1999 at 18:56:17:

Hi Shenesa,

First. You?ll probably get more responses to your posts if you don’t use all capital letters. Using all capital letters is considered shouting and makes the text hard to read.

Second. It sounds like you need to do your ‘Due Diligence’ before you do anything else. You need to know things like:

What are these houses worth (Fair Market value)? (PS: Don?t rely on a realtor for this information).

What condition are they in. For example: Foundation, Plumbing, Electrical, Roof, etc? If any of these things are faulty, that reduces the value of a house and creates a possible negotiating tool for you, if your findings are not beyond reason.

Are the current rents up to par for that particular area?

Are there any city project issues to consider? For example: Is the city planning to widen the street, which may take a good chunk of the front yard and devalue the property? Conversely, is the city planning to re-pave the street, without widening it, which would improve the value of the property? Any plans for new schools in the future? Any plans for getting rid of schools in the future? Depending on your exit plan for these properties all, some, or none of these issues may be relevant. You do have an exit plan, right?

How is the neighborhood in general? Safe, Quite, Well maintained?

What about schools, are they bad, good, excellent?

These things (and other things you investigate) will impact your decision to pursue the properties and help you come to a price that YOU are willing to pay for them.

PS: Consider this statement. Due diligence WILL be done, when, will determine how much it costs you.

Best of success to you,
Paul Freeman