need advice "help" - Posted by goerge

Posted by Frank on December 10, 2002 at 14:50:32:

Well… it is exciting to look at deals and I can read the excitement in your post. This excitement is good because you’re getting the idea that money can be made in this busness of RE. but don’t let it stop you from carefully appraising the plus and minus of each deal just because your getting the acquire bug. The best thing is to have an exit strategy before you enter the deal.(How will you come out ahead either on the net income or the resale of the property)The excitement of buying this property will be long gone when you want to cash out especially if you are upside down on the rents or resale value or both.

Now, You’re right in saying your going to get more info. because you need at least the following:

  1. Property taxes. The pmt looks like 8% interest for 30 yrs. But that’s just PI. Taxes on a 240M house might be a deal breaker or not.

  2. What is insurance going to run monthly? Then you will know the PITI that will come out of your pocket each month.

  3. Rents in this area. Look at the for-lease signs in the area, call the numbers and ask about the houses to get comps and about the rent arrangements. Then you’ll have a feel for how much the prop. will rent for.

3)Sales in the area. Again, call for-sale sighs, ask about the houses to determine how comparable to your prospect and the asking price.

4)Go on line and find a real estate agent that lists market prices for the prospects in various subdivisions. Many do this to attract clients. Then check the tax roll info on the internet for sales but remember that they are usually about a year behind. Your state may be a state that publishes home sales prices. I believe that www.netronline provides many of these services for free.

  1. Of course there is a careful inspection of the house. If you decide to do a deal, then you should order inspections for termites and other hazards that might be lurking behind your deal.

6)I’m not really a creative financing guy. Cause I like a lot of my equity in my deals for safety. But, I guess You might offer him a smaller first and give him a large baloon for the second as a down. He could probably sell all or part of the 1st and maybe half of the baloon. This way there is no cash out of pocket except inspections, appraisal, closing, and escrows.(this might be a tidy sum alone.) The smaller the first and larger the baloon, the more manageable the payments. The baloon would probably be payable in 5 yrs. and you would have to start working on a strategy to cover it. That’s why its best to buy below market, usually 20% of more. The papersource or notenetwork can buy the guy’s paper if that’s what he’s looking for.

I’m sure some of the more experienced creative guys have better advice for you.

And always remember, there are a lot of good deals out there, you just have to keep looking but that means that you don’t have to take the first thing that comes along.

Well, Lots of Luck

need advice “help” - Posted by goerge

Posted by goerge on December 10, 2002 at 04:27:02:

Hey guys its George i was looking for some property and came across this

Owner Financing, No Qualifying, 4+3+3, 2200sf, tile roof, 12 yrs old, spotless. $239,900 $25k down. $1575/mo xxx-xxx-xxxx

What do you think i could do as far as creative financing i have not done a deal yet and this looks like a great one just cus there r signs of the owner being flexible
i will have more info on the prop. when i call on Tue 11th but if any of you could give me some advice on perhaps a lease Op. or a no down payment Op. i would so be grateful i don’t want to screw this up
thanks george

Re: need advice “help” - Posted by Clair-MO

Posted by Clair-MO on December 10, 2002 at 22:42:34:

George, I would find out why the seller is selling his home and if there is any mortgage still on the home if so how much? If the seller asked why you need to know that information tell him it is because knowing the amount owed on the home you will be able to give hima fair and reasonable offer! I would ask the seller to reduce his asking price by at least 10 to 20% and I would try to negotiate a lower down payment and monthly payments by 5%. His asking price is: 239,900 reduced to $191,920=20% 215,910=10% 203,915=15% based on your knowledge of what the present amount of money still owed. I would try to negotiate the monthly payments where you will clear at least 300 to 400 dollars positive cash flow. The down payment I would negotiate would 3 to 5% of the agreed purchase price. $7k to $12k down payment.