Newbie with question about numbers on first deal... (long) - Posted by DJ (MD)

Posted by DJ (MD) on August 24, 2000 at 20:36:49:

Sorry, Yes he is motivated. and the house is below market value. Most 2br/2ba homes go for around $85,000-$90,000.

Thank you in advance.

Newbie with question about numbers on first deal… (long) - Posted by DJ (MD)

Posted by DJ (MD) on August 24, 2000 at 12:07:25:

OK. I have been reading through the posts. I read them just about every day. I have been researching Realestate for about 2 yrs now, live and breath it. Well, I bought the CS course, Thought I’d research a little more. Then I figured I’d “Just Do It”. Well, I ran an ad on a local website standard, 3br/2 ba for rent $850. mo… etc… Well, I got around 10 calls on the property. Problem is I don’t have one… I have been researching a few REO home in my area. I also found one that a contractor of mine is selling. OK Here it is: It is a log cabin 2br/2ba, planned community, currently rented for $600.00 per mo, lease can be up or I can extend the tenant. She is currently mo to mo.
OK the seller wants to be out from under the current first, it is a $30,000 loan. (he doesn’t want to bother with the property anymore, and doesn’t need any immediate cash.) He wants $75,000 for the property. I am wondering if I should offer to take over the first. (I have to find out what the payments are). And Owner finance the existing $45,000. Now, could I have him hold the $45,000 @ 10% interest, pay the interest out over 2 yrs with a balloon at the end of the 2 yr time period? Please any advice would be wonderful. I would like to know if I am way out in left field with this.
Thank you in advance.

DJ
REI in training

Re: Newbie with question about numbers on first deal… (long) - Posted by Paul_CO

Posted by Paul_CO on August 25, 2000 at 16:16:28:

So the first might be at about 8% and the second at 10%
Interest only payment on that would be 575, add taxes, insurance, fixup, vacancy, advertising expenses and you are probably at good $900/month. You are renting for $600. Thats a lot of headache for loosing $300 every month.

Re: Newbie with question about numbers on first deal… (long) - Posted by dewCO

Posted by dewCO on August 24, 2000 at 17:02:52:

Fist you need to be clear as to what the property is worth! Usually you’re looking for a MOTIVATED seller and buying under fair market value.

Then will it cash flow under your scenarios. This will probably able you to answer your own question.