Posted by Chuck (AZ) on July 11, 2001 at 01:17:16:
Read this…
Possible First deals - Posted by wayne
Posted by wayne on July 10, 2001 at 02:35:00:
Well they have been along time coming, but I believe I have 3 winners.
I have a large chunk of the entire last 7 days doing my due diligence on about 10 deals and 6 of them were losers.
Possible deal #1 Will be a contract for deed for a triplex, owner’s are willing to do 100% financing. They are about to retire to Florida and like the idea of monthly checks for the property. They own the property 100%. This deal came from a contact through a family member (who also own 4 other properties that they would like to get out of).(I love real estate). Anyway, the properties have long term renters, the rents are each 50 bucks more than any in the area, and will generate a positive cash flow of around 100 bucks per unit for me.
Possible deal #2 A single family home, people are interested in l/o, They bought a new home and the house has been sitting empty for 3 months with no buyers. They are running out of money and are risking becoming in arrears within the next two months. Value of home is around 150k, current financing on it is 110k, They just want to be able to cover the payments for the rest of the mortgage, So I can pick the house up for a grand total purchase price of 110k. Lease option consideration of 2k with payments of 800 per month. Through some due diligence, I have found that the block has only 2 rentals, and they go for around 1100 per month.
Possible Deal #3. Out of state owner for an 11 unit apartment complex. Inherited it from brother 2 years ago and has never even seen it. I found this property through a contact that knew the owners brother. Entire apartment complex is 100% owned. Will need approx 5k down with remaining balance of 120k to be amortized over 30 years with a balloon in 7. Each unit generates 680 per month in rents. This is the best one in the bunch since the owner as far as I can tell really has no clue as to the potential of this property. He just wants out because apparently there are some problem tenants that threaten lawsuits since it takes so long to get any response from him when their are problems or repairs and/or maintenance needs to be done.
The beutiful thing is that this guy called me, Even though I have never done a deal yet, everyone I meet, I just basically walk the walk and talk the talk of a seasoned rei investor. The great thing is that I have instant credibility, woohoo.
I have looked over all of these properties with my general contractor partner and they are all in pretty good shape. Money needed is marginal for rehabbing. Around 6k for all properties together.
Hopefully the next couple of weeks will be very profitable to me not to mention the line of credit I applied for is starting to look pretty good (got an appointment tomorrow with the banker, wants me to bring along my general contractor and go into greater detail of how we will turn properties for rehab, I knew the bank had potential since its advertising motto is "Creating Possiblities, Not Limitations).
Also if anyone is interested, I may be getting about 100 acres in North Dakota…wont have the specifics until july 27th (Inheritance). 5 heirs, 500 acres all together. I will post on here when after the 27th with more specifics.
Re: Possible First deals - Posted by Chuck (AZ)
Posted by Chuck (AZ) on July 10, 2001 at 03:59:24:
Assuming that you wanted feedback…
Deal #3 - Oh yea… get the maintenance issues under control and this one walks you to the bank!! I’d try to eliminate the balloon if possible, otherwise it’s a 9.5 money-maker!!
Deal #1 - The only thing that saves this one, is the prospect of getting the other properties that they have… kind of like dating the best friend of the girl you really want to be with, and hoping she notices you.
Deal #2 - Totally put me to sleep.
Re: Possible First deals - Posted by Matt
Posted by Matt on July 10, 2001 at 18:01:30:
you’ve got to be kidding. #2 is a $2,000 total outlay for a $150,000 property with a $300 a month cash flow…LOL…yeah, total yawner!
I’d jump all over that…nice ROI…$40,000 equity–what are you waiting for?
Re: Possible First deals - Posted by diana
Posted by diana on July 10, 2001 at 17:46:08:
I’m curious. Why did deal #2 put you to sleep. I have a simular type deal going.
Diana
Re: Possible First deals - Posted by Chuck (AZ)
Posted by Chuck (AZ) on July 11, 2001 at 24:11:08:
Read that again… your off a few thousand.
“…Value of home is around 150k, current financing on it is 110k, They just want to be able to cover the payments for the rest of the mortgage, So I can pick the house up for a grand total purchase price of 110k. Lease option consideration of 2k with payments of 800 per month.”
Re: Possible First deals - Posted by Chuck (AZ)
Posted by Chuck (AZ) on July 11, 2001 at 24:42:48:
That should be clear, because it’s SFH.
You want details? Ok.
Deal # 2 is a $110k total investment. It will generate ONE payment per month IF/WHEN it is rented… right now it’s costing someone money… all outgo, no income.
Deal # 3 is a $120k total investment. It generates 11 payments per month in rentals. It HAS generated them, it IS generating them, it WILL generate them. You could live in one unit rent-free, and rent out the other 10. The cash-flow will make the mortgage payment for you and a healthy profit. It will hold it’s value BECAUSE it is a INVESTMENT property, and thus it has a higher re-sale value. A bank will loan on it BEFORE it would another SFH.
So, which is the most profitable INVESTMENT?
Deal #3.
Re: Possible First deals - Posted by Matt
Posted by Matt on July 11, 2001 at 24:19:45:
“off a few thousand”…ok, so it’s only $38,000 equity on a $2,000 investment…yeah, that sucks.
A pretty solid deal…why does that put you to sleep? 150%+ ROI returns (cash flow) in addition to that “less than $40,000” equity not good enough for ya? Wow.