Posted by Lou(TN) on November 25, 2002 at 07:51:06:
No, No, No, Im sorry for not explaining myself better. I signed a land contract or contract for deed. That is a contract that says I will pay a monthly payment to them until our agreed upon price has been paid in full. The only money that exchanged hands is the earnest money I gave him to bind the contract. $1.00.
He agreed to give me possesion Nov 1. But my first payment was due Dec. 1. That gives me a month to get someone in there. I paid a month in advance so If I ever run across a tenant/buyer that does not pay his payment I have time to straighten things out before I am late. My tenant buyers pay the bills and I collect an up front option fee from them and a monthly spread on the payment of about $100 bucks. If they default I use their option money to pay the payment while I evict them or resolve the issue.
I suggest searching the archives and learning the mechanics of some of the different types of deals you can do. Then apply the method that best fits your market, and financial situation.
First deals with BAD credit, NO money/downpayment - Posted by Lydia
Posted by Lydia on November 24, 2002 at 19:03:32:
Hi. The main idea I have gotten is that you can buy real estate with no money down, poor credit and no cash to put into the property (which is my situation). All the “creative ideas” I come up with depend on having at least one of cash, good credit or a downpayment. For example, I can see that if I lease option I will have put no money into the property. However, wouldn’t the seller want to see that I had good credit? Otherwise, how could the seller expect me to make the payments on time? (Yes, he has the house as security, but what seller wants to hassle of having to evict?) Is there anyone out there in my situation (BAD CREDIT, NO MONEY, NO DOWNPAYMENT) that has SUCCESSFULLY gotten into their first deal and how did they do it??? I want to get as many of those success stories as I can get! Thanks!!!
Re: First deals with BAD credit - Posted by Kristine-CA
Posted by Kristine-CA on November 25, 2002 at 01:28:10:
Lydia: I did my first flip deal with bad credit and no down. And virtually no money. I had to put $100.00 into escrow. And I had to market the property–classified ads. And I had to pay for long distance phone calls, faxes and fed-exs. And for the notary. So, I don’t see how it can be done with NO money. But a couple hundred dollars for several thousand is a pretty good trade off.
You will hear it again and again on this site: Work with only motivated sellers. If they are not motivated, they have more choices and more time to get the price they are looking for. It’s a numbers game so one needs to make lots of offers.
Re: First deals with BAD credit, - Posted by lou(tn)
Posted by lou(tn) on November 24, 2002 at 21:39:10:
You have to be dealing with motivated sellers or else you are wasting your time. I am new at this and in the last 2 months I have purchased one on a land contract and have two in the process and not one person has even asked if I had a job. Why is that? because they are motivated sellers. The deal I purchased the owner lived out of town and was moving a couple of states away. He did not want to deal with tenants or maintenance anymore. The others are transfering and cant afford two payments. I offered to pay off their loans (little equity) and take over payments with a lease option. Their propblem is solved since I do all of my own maintenance and pay my first month rent up front. Except it is usally a month in advance so I have time to market and do minor clean up after they leave.
Bandit signs work wonders for getting motivated sellers but make sure they are ligal. I had to take my down or face a $500 fine. Oh well It got me my first deal so they paid for themselves many times over.
Re: First deals with BAD credit, - Posted by Lydia
Posted by Lydia on November 25, 2002 at 24:42:37:
Thanks for answering me. It is good to hear you are doing so well as a beginner. So you started out having enough to pay off their loans and the first month rent? If not, how did you get it?