first property blues - Posted by john smith

Posted by JPiper on August 22, 1999 at 14:29:32:

Carpet you may be able to skip…especially if there is some hardwood floors that can be cleaned up (not refinished, just cleaned up.)

Two rooms to be sanded and painted can be left as well. This is cosmetic type work, easy enough, that someone could do.

“Kitchen not started yet” is another issue. The question is whether there is an existing kitchen. If there is, I would consider leaving it.

While the house is not in perfect shape, you may be able to owner finance it as I suggested earlier, and as Bud has suggested above. Make the repairs as part of the contract…with a schedule as to when and how they need to be completed.

Later the house can be refinanced after the repairs are made, or the note may be sold after seasoning and after the repairs.

Good luck.


first property blues - Posted by john smith

Posted by john smith on August 19, 1999 at 22:21:23:

the first property i am workig on is a nightmare.
i already have 50,000 in it. 20,000 cash + a 30,000
mortgage on it with payments of 430 per month.
it is 3/4 of the way done, but i am out of money
to finish it.the problem is it is only going to be
worth 60,000 once completed. what if any our my options
on this house that i just can’t seem to win with.


desperate and broke

A thought - Posted by Bud Branstetter

Posted by Bud Branstetter on August 22, 1999 at 12:48:30:

Go down to the bankruptcy court and find the people that have just gone bankrupt. Contact bankruptcy attornies. Advertize for people that have gone bankrupt. Then sell them you house with the provision that they finish the work within a year. Sales price should be 75K with 800/mo payments. It does not get you your cash back quickly but it does help the cash flow. You may be surprised to find that people would buy on those terms.

Re: first property blues - Posted by SL-VA

Posted by SL-VA on August 20, 1999 at 15:08:59:

JPiper said it well.

What prompted you to buy that property in the first place? What went wrong? Was it your estimate of its FMV? Was it your estimate of repairs?

As JPiper said, learn from your mistakes.

Re: first property blues - Posted by JPiper

Posted by JPiper on August 20, 1999 at 10:28:17:

It doesn’t appear that you have any magic answers here that will make this situation go away.

What you don’t say in your post is what these remaining repairs are. That’s important. Is the house livable without the repairs? Is the house in a condition where a retail type buyer could obtain a loan on the property? A further important question is what the cost of these repairs is. Without the answer to these questions it’s going to be difficult to answer your question effectively.

However, it would appear that one option (if the house is livable) is to sell it to a retail buyer who is interested in a “deal” and who is willing to make some cosmetic type repairs. If the house is in good enough condition for this buyer to obtain a loan, this “might” work. Another alternative though is to sell the house with some form of owner financing (again if it is livable). This solution does not in and of itself give you your cash back, but it stops the bleeding?.and perhaps after the buyer completes the repairs he can refinance?thus giving you your cash back out.

If the house is not livable?.or if the repairs are too costly and/or complicated for the average retail buyer, you have a problem. One solution to this would be to get a second mortgage on the house. It appears you have sufficient equity to obtain a second. This cash could then be used to complete the repairs. You’re not going to profit when you sell, but the loss won’t be as heavy as the next alternative.

You could sell to a rehabber. The problem with this is that if you were selling to me?I would only be offering in the 30’s?.depending on what exactly the repairs are. This gets you out of the situation, but you experience a heavy loss.

Post the current condition of the house, and what the remaining repairs are together with their cost, and perhaps we can amplify on your options. Either way, your goal at this point should be to recognize you have evaluated this property incorrectly from the outset, and that at this point your goal should be to minimize your losses. Rehabs are NEVER easy, even for the experienced?.and that fact should be kept in the forefront of anyone’s mind as they evaluate a prospective rehab.

Also understand that out of life’s painful experiences there’s always a lesson to learn, which when learned can help to propel you to an even higher level. Try to focus on recognizing the lesson to be learned here?not focus on berating yourself. We all make mistakes. Once you recognize the lesson, learn it, pay the price, and then move forward. It’s just a deal. There’s a better one right around the corner.


Terms - Posted by Jim IL

Posted by Jim IL on August 20, 1999 at 24:17:23:

Dear John,
As many here always say, there are two ways to make money in Real Estate.
1.) Buy cheap and get the home for UNDER value, WAY under.
2.) Terms, buy and sell on terms.

I personally like the second because it takes little to no money to get in and we can enjoy cash flow and CASH upfront when we sell.
You may want to sell this home on some kind of terms.
This way you can generate the CASH upfront you want, and also get some cash flow.
The price can be higher, because you are making it easy for the buyer to get in.
You may even find a buyer who will finish the job for you and pay you all at once.
Is the home in liveable condition now?
If it is, then you can sell it quick, with owner financing.
There are many articles here and posts that can tell you a few ways to do this.
Read them and go do it.

Then, let us all know what you did and how it went down.

Just my $.02,
Jim IL

Re: first property blues - Posted by john smith

Posted by john smith on August 20, 1999 at 21:38:33:

i would have to guess the house needs 10,000 in repairs
the kitchen isn’t started yet!
it needs carpet trough out the house.
it also needs a little work on the porch.
2 rooms our left to be sanded and painted.

yea bye the way i had to fire 3 contractors
already do to their inability to recall wear
they were contracted to work at.

contractors our very evil people!

Re: first property blues - Posted by SL - VA

Posted by SL - VA on August 20, 1999 at 15:46:22:

>>Rehabs are NEVER easy, even for the experienced?.

Even as I have no experience in rehab, I believe this is so true. However, I am seriously considering doing my first rehab property - GULP!!!