Newbie needs advise - Posted by JeffGa

Posted by FRANK COLLETT on January 20, 2001 at 19:06:21:

have you thought about getting a contract of assignment, and flipping it to another investor?

Newbie needs advise - Posted by JeffGa

Posted by JeffGa on January 20, 2001 at 18:03:48:

After spending some time reading here, I decided to take the plunge.
I have put out flyers, and have gotten a response.
Now I need some help to proceed with this.

The property is a 3 brm 2 bath 1800 sqft completely rehab.
The owner is a Land lord who is tired of renting.
He claims it to be appraised at 55K, and wants 34K. He stated he is firm on the price. However, the more he talked, the more it seemed that he wanted mostly to get out of the 18K note he has on it. (Cash out)
He does not sound willing to L/O
Now my situation:
No Cash
No Credit
No experience.

Any suggestions?


Make an offer… - Posted by Dave I.

Posted by Dave I. on January 20, 2001 at 22:37:54:

The first thing I would do is drive the neighborhood and look at comparable homes for sale. What are the prices on these homes? Does the $55,000 value that the seller stated still sound right? If it does, make an offer. No Cash (no problem), No Credit (no problem), No Experience (no problem;maybe). The thing that I can tell you to help you out the most is to put an escape clause or contingency clause in your earnest money agreement. So if you come back to this board and state what has conspired with your deal, and find you have made a mistake, you can then get out of your contract. Put in a clause something like this: This offer is contingent upon buyer and/or partner completing and approving inspection of property within 30 days of this contract. Now…if the property is really worth $55,000 I would start out by offering $20,000 Cash. You can always go higher but you can’t go lower. If they agree to this then you could find a hard money lender to loan you this amount. You could actually borrow around $35,000 ($55,000 x .65 = $35,750). Hard money lenders will usually lend up to 65% of the market value of the property. Don’t worry about not having cash or credit. They usually loan on the value of the property and nothing else. Of course, they will charge higher interest and maybe points (a percentage of the loan). Now, even if you settle on $30,000 for the final selling price you can borrow this to buy the home and then turn around and sell it for $55,000. You could offer owner financing or take trades for your equity so that you could turn the deal really fast. Rememeber, that investors or hard money lenders don’t care about your credit or how much cash you have on hand. They are soley concerned with the safety of their investment. So…if you can calm their worries with a safe, secure investment then you can buy property from motivated sellers. Hope this helps a little. Good Luck… Dave I.

Re: Newbie needs advise - Posted by Charity

Posted by Charity on January 20, 2001 at 18:54:18:

Does it need rehab or has he already done the rehab? How much did he get in rent? What is your exit strategy with the property?


Re: Newbie needs advise - Posted by JeffGa

Posted by JeffGa on January 20, 2001 at 20:14:59:

It has been completely rehab. Before the rehab, it was renting for 550 per month.