advice please? - Posted by Joe

Posted by joe on July 09, 2002 at 13:18:38:

Tim, thanks for the comments. I did think about the possibility of vacancies and I do have the cash reserve for that just in case. I guess what I need to decide is whether the possible reward in l/o at a higher price is worth the risk.

Joe

advice please? - Posted by Joe

Posted by Joe on July 09, 2002 at 10:29:59:

I have been learning creative RE investing for a couple of month and have not really applied it yet, but I just stepped upon a luxuary townhouse I cannot just ignore. I wanted to give an offer but I’d appreciate any opinions.

5 years old luxuary townhouse with the best master suite you see from a million dollar house

its nextdoor neighbor, an end unit with one more fireplace, just sold for 700,000 last year

owner asked for more than 700,000 but I know from insiders that they will accept 650,000

I also know somebody else who are not short of cash but have a history of bad credit for business bankrupcy might be interested in L/O the town house,

so my plan: L/O the town house at 650,000 or lower, and then l/o to that guy with bad credit or somebody else. I need to figure out other specifics, but this is what I am thinking right now.

potential problem: hus of the family moved to another state and wife may follow quick. They need cash for downpay to buy a new house there.

Apprecite any advice in terms of whether this looks a good deal and how to proceed, etc.

I know i am not quite ready to invest yet, but I don’t want to see this one pass by.

Joe

Re: advice please? - Posted by Tim Fierro (Tacoma, WA)

Posted by Tim Fierro (Tacoma, WA) on July 09, 2002 at 13:08:22:

If you know you are not quite ready to invest yet, should your first deal be a $650k town house? While you have someone lined up to possibly be the T/B, what happens if they say no and you have to find another T/B’er? Can you afford the monthly payment (how much is that payment per month?) while it sits vacant for a month? What if it was vacant for 2 months? Do you have cash reserves to hold you through vacancies?

If you have thought about those things, and the risks of being in the middle on this expensive transaction, then you should proceed based on your risk tolerance. If you have not thought about the future and what can happen, then you should re-think everything thoroughly before going to the next step.