Posted by Dave T on March 05, 2011 at 24:11:17:
I don’t shoot for a minimum amount, instead, I have a minimum ratio. If the NOI is at least 125% of my debt service and if the return on invested capital is at least 15%, then the cash flow is acceptable.
fannie mae offer - Posted by bill
Posted by bill on February 23, 2011 at 15:05:53:
Fannie Mae single family property. Here is the price history.
Started in november at 99,900
december 24th lowered to 69,900
Feb 1st lowered to 59,900
I offered 46k and they countered at 57k
I offered 50k and they countered at 58k
I offered 53,500 best and final offer.
They countered at 55,500.
Am I a fool for trying to get this any cheaper? I like the property. I would only be cash flowing about $100 a month on it but can buy it with zero down.
Re: fannie mae offer - Posted by Dave T
Posted by Dave T on February 26, 2011 at 23:51:13:
Fannie Mae is very inflexible when negotiating a sale price.
What does this place offer… that… - Posted by JT-IN
Posted by JT-IN on February 25, 2011 at 18:22:40:
That 10% of the other 1000’s of props for sale in the mkt don’t offer.,.,.? If the answer is nothing, or very little, then I would say PASS.
Also if the reason that you are willing to accept this meager counter offer (quasi deal) is because you are tired of looking, then that is also the wrong reason to acquiesce. There are tons of deals out there, just be firm and demand a deal, or else.
If it were me… I would let their counter offer expire, keep an eye on the place and wait until the price is reduced again. Keep in mind that you have some Gov’t employee on the other end of the offer process and their green check shows up no matter whether you/they do the deal or not. Always, always, always… did I say “ALWAYS” be prepared to walk away from a potential deal. Practice it; maybe even walking away from some you shouldn’t, but eventually this mindset will pay off for you and be much more profitable than accepting deals that you shouldn’t.
Now, should you or shouldn’t you…? We have no idea… What does this deal offer that the next 5 best properties that you have seen in the last year, didn’t offer…>? Depending on that answer will determine if this property is the one for you NOW.
Good luck on it.
Re: fannie mae offer…offer final low 40K’s - Posted by james_CA
Posted by james_CA on February 25, 2011 at 01:16:38:
I think u have to put 3% at least for OC, and 10$ NOC, how come no down.
100/mo after piti is not good enough. You need to build in price decline, rent decrease potential. I would offer very low and if no just find a next deal. I am sure they will be plenty good deals out there. I am doing the same thing in Inland Empire/Riverside CA.
Good luck and keep us updated.
Re: fannie mae offer - Posted by Lee in La
Posted by Lee in La on February 23, 2011 at 23:17:57:
You are buying in a market that we have NEVER been in
before, even in the S and L mess wasn?t like this!
Jobs are almost nonexistent, many have been unemployed
for more than A Year, educated professionals who have
never been unemployed.
I spoke with someone today who has 30 to 40 years in
banking/ mortgage industry who now works in the
courthouse who said, even the ones that are well off
are falling (being foreclosed on). I filed a
foreclosure suite today on a prominent city department
president.
Dollars that you use to pay the mortgage back in the
future will take more effort to obtain and will be
harder to come by.
Personally, I think you would be wise to wait ? a year
or maybe two to see/ make sure the economy has begun to
get ?traction? before getting into debt and taking such
a large risk (53 to 55K) for such a small cash flow
$100. per month. A bad tenant, damage to the dwelling
or a extended vacancy Will take you out, unless you
have adequate reserves or income.
If you just cant stand it/ gotta have it, Tell Them
40K!
You?re the Boss!? You are the Buyer
we haven?t seen the bottom yet
No Debt Lee, in LA
Re: fannie mae offer - Posted by bill
Posted by bill on February 27, 2011 at 13:55:42:
Tell me about it! Unfortunately where I am, most sellers are inflexible.
Re: What does this place offer… that… - Posted by bill
Posted by bill on February 27, 2011 at 13:54:47:
Thanks JT!
What would make you pass? Would it be that it would only cash flow $100 a month? I am in no way married to this deal, but with putting nothing down, to cash flow more, I would need to be looking at properties in the 30,000-40,000s and around here those places are ready to fall down.
The $ 100 mo is too low… for one - Posted by JT-I N
Posted by JT-I N on February 27, 2011 at 17:19:03:
Bill:
100 bucks per month in pos cf is not worth the risk of owning a piece of real property, IMO. Besides, why would you think that it would sell this month… and not hang around on the mkt another month and then they will reduce the price again… therein maybe you an even better deal.
Sure, I don’t know the mkt but I wouldn’t accept 100 bucks pos cf for the risk of ownership today… you aren’t likely to have much appreciation in todays mkt for some time, and almost just as likely to have further erosion in prices, at least temporarily.
So who is your competition to come in and buy this place… who is to say they will before the price is reduced again. There have got be better deals in the mktplace… finding them is always the key. You need a severe don’t wanter, someone who is willing to just give you the property… with some equity too. They are out there, but not as easily found.
BTW, where do you today to get 100% non-owner occ mtgs? I wasn’t aware of anyone doing such a thing today. Please advise.
Re: The $ 100 mo is too low… for one - Posted by Bill
Posted by Bill on February 27, 2011 at 22:38:40:
Thanks JT for you wisdom its appreciatd. $100 a month was my low side, it will likely be $200 but I know nothing to write home about.
My only fear is many properties have been sold around here right around this price point that have been in much worse shape. I know, I have been in them.
My credit union will lend up to 90 percent of appraised value with nothing down. Of course I am assuming this place would appraise for just over 60k. I think it will buy who knows these days.
My only fear is… - Posted by JT-IN
Posted by JT-IN on February 28, 2011 at 07:50:48:
Those words can be costly… NEVER be afraid to lose one; FEAR should come in the form of being afraid of getting one that isn’t a winner; stuck with a loser… That is a bad feeling.
Again, I would have NO fear of passing up 10 mediocre deals to find one really strong play. Set high standards and strive to achieve them. If you decide to settle for a 100 bucks, after going out and obligating yourself personally-financially, that may be a steep price to pay for such a meager c/f. Just my opinion though.
Not sure where you are located but it seems that there are better deals almost every which way one turns in this buyers mkt. Sharpen the pencil, get committed to finding a kick-arse deal… and you will. Good luck on it.
Re: My only fear is… - Posted by Bill (WI)
Posted by Bill (WI) on February 28, 2011 at 09:14:23:
JT
You are defenitely making me re-think this. I am in a small city in eastern wisconsin. We have not seen the highs and lows of some other cities but there is certainly alot for sale here.
What would be your minimum cash flow on a property where you are?