Step one... - Posted by Frank in Seattle

Posted by Frank in Seattle on November 23, 2001 at 13:39:13:

Q: Your first step is to determine what your purchase is all about? Are you buying the house to live in or as a rental?

A: I want to fix it up/sell it/make money. Investment property all the way. I don’t have the capital to rent, yet. I would never be living in this house, unless it is a stipulation from the bank/lenders. As my mortgage broker says, “There are ways around that.”

Q: what would you think it would cost to bring it up to market or make it a house that is not a house that doesn’t FIT

A: They bought it for about $85,000. I think since they have not done upkeep on it I would buy it for around $90,000. I’d assume about $20,000-$30,000 to fix up. TOPS! Sell it for maybe $10,000 less than market value ($220,000)

Q: if the house only has some cosmetic problems and you have the income and a credit score of 620 or better, you could finance the property with 100% financing.
A: No verifiable income. No down payment. No money. I will be the No money down king, at least on my first one anyway. Broker said it’s not a problem. Not exactly sure on credit score. How would I find this out?

Q: I would lease option it for 6 months, giving me time to do the fix up and repair, and then 100% finance it.

A: Would my mortgage broker be able to do this for me? What if the seller doesn’t want to sell after I do the fix-up?

Q: YOU MAKE YOUR MONEY ON THE BUY
A: I think $120,000 profit is a pretty good buy. Maybe too much. My conscience getting in the way a bit here. Of course after the numbers have been crunched I could re-evaluate the offer.

Q: I read about a purchase contract on another post. Any ideas? I know I wouldn’t make as much, but I’m more after experience than anything.

Thank you for your reply!!

Step one… - Posted by Frank in Seattle

Posted by Frank in Seattle on November 22, 2001 at 18:41:09:

Here’s the scenario. My neighbor dies due to neglect from their childeren with whom is supposed to be taking care of her. Horrible, horrible, but I don’t want to get my emotions confused with business. I do have, however, plenty of thoughts of what I would do to them, but won’t go into them now on a business site. The house they live in is in poor shape. Blackberry bushes growing rampidly through poor up-keep. There’s moss on the roof, gutters are, well let’s just say not NEW. There is even a small dumpster in their driveway. My landlord bought his house (my residence as well) at $230,000. Same floor plan and everything. Nice neighborhood, but this one house next door is the ONLY one in semi-bad shape. Every neighborhood has a house that just doesn’t FIT. This is it. I know I can make money off of it. I read about a purchase contract. Who would I go see about this? What is a purchase contract and how does it work?

Thank you for any advice!

Re: Step one… - Posted by Ed Garcia

Posted by Ed Garcia on November 23, 2001 at 09:20:18:

Frank,

Your first step is to determine what your purchase is all about? Are you buying the house to live in or as a rental? Because you are a renter, I’ll assume that you’re going to purchase the house to live in.

You have told us what your landlord purchase his house for which gives us an idea of market. But you haven’t told us what you want to pay for the house and what you think it would cost to bring it up to market or make it a house that is not a house that doesn’t FIT, as you put it.

You haven’t told us anything about you, your credit, income etc. But if the house only has some cosmetic problems and you have the income and a credit score of 620 or better, you could finance the property with 100% financing.

The seller is definitely motivated, I would lease option it for 6 months, giving me time to do the fix up and repair, and then 100% finance it.

If this is going to be your first deal, and it’s owner occupied, of course you could pay a little more than if you purchased it as an investment property. However after saying that just keep in mind, that YOU MAKE YOUR MONEY ON THE BUY.

Ed Garcia