Posted by David Krulac on December 06, 2002 at 16:21:35:
in the neighborhood it could be overimproved and overbuilt for the neighborhood. You never want to buy the most expensive house in the hood. The lower priced houses will bring your value down. the seller may be having a hard time selling this house and is offering owner financing because of the hard time selling and the unlukelyhood of getting the high appraised price he is looking for. If you could buy for LESS than $200k, it MAY be a good deal. I’d be cautious and don’t make the seller’s problems your problems.
Posted by Chris Chicago on December 06, 2002 at 02:40:52:
I am working on my first no money down deal and I am looking for a little help. There was a house down the street from mine in the summer and the grass got around 2 feet deep so I started asking around hoocked up with the owner he has not even put a $-sale sign up and I have been talking with the owner for about 2 months now. He is not in a hurry but it is sitting vacant. He wants 290k and I had a realtor look at it and said that is about what it was worth if the inside was fine I think the inside needs updating to be worth that anyway I have renters all ready set up for 2300 a month. I want to offer this guy some incentive to finance it for me CAN ANYONE HELP with any ideas how I should approach him.
Thanks
Chris Chicago
Once in a while one may need to “romance” a property seller for a period to make a deal happen, also known as establishing rapport.
However, there is no deal here, is there? The owner wants to sell for full market value. Why would you want to pay full market value? Are you an investor or a sucker?
You don’t need to pussy-foot around. Make an offer at no more than 75% of market value and see what happens. Then, unless you get a deal for no more than 80% of market value, drop the whole thing.
You may have to talk to 100, 200, 400 property owners to get a good deal. This is not currently a good deal. The chances that it will be a good deal are very close to zero. Don’t waste more time on it. This is a game of numbers. TRANSLATION: quickly test to see if a property owner is a potential seller the way you want to buy, if not, on to the next candidate property.
The point is not to learn what a good deal is, the point is to learn what a good deal is not. And, unless you can buy this property for no more thanm 80% of market value, this is not a good deal.
I too am in Chicago area and new to REI. This guy does not seem motivated yet. Does he own it free and clear? If not can you do “subject2” or Land Contract. Will he consider L/O?
Posted by Chris Chicago on December 06, 2002 at 15:31:22:
Ron Thanks for your input I cant say if this is a bad deal. The market value is hard to come up with this is th only house in the neighborhood of its size it is a raised ranch with an addition on the back which doubles the size of the house 1800sqft is what the house was before the addition and now it is 3800sq ft I live five houses from this unit my house was appraised at 245k as of last month this house has a bigger lot is 5 rooms 3 bath and I already have renters lined up for 2300 month. I have a rental that is half the siza 4bd 2bath and am getting 1750 a month in my city and this is in the best part of town. Do you still think if he will finance this for me and I will be making about 200 a month in cash flow its still a bad deal the real estate in my city has been kicking but over the last 3 years or more.
Thanks
Chris
Posted by Chris Chicago on December 06, 2002 at 09:52:15:
I am almost sure he owns it out right. It has been vacant for 9 months and after I had my inspector look at it on Tuesday he told me he was busy this month and would like to do things in Jan. He said to me he owns other houses but this was were he lived until 9 months ago I know this is the case because I am friends with one of the neighbors. I don?t think he has to be motivated to owner finance. I have not even discussed any financing with him that is why I need help I don?t want to scare him away. We have talked many times and I think he has a feel for my corrector, which is good. I would like to do a land contract, but would like to approach him the right way.
Chris
Posted by Heather -Tx on December 06, 2002 at 16:24:49:
Just dont get a vacancy… at 200/month profit One month vacancy = a Years profits down the tubes
Of course Ima Newb so dont listen to me LOL I’m just still gun-shy about houses with that much rent a month and not much backend profit. Prolly just me !
