california creative real estate challenge - Posted by copie

Posted by copie on June 01, 1999 at 21:58:23:

how stupid of me!

those are the most important factors and i forgot to post them.

i have yet to meet the owner but i’m told that he’s a retired gentleman who bought the property years ago and has since paid it off. he doesn’t want anymore landlord hassles and wants to get rid of the place…hence the price.

the fact that he is willing to carry a second tells me that he doesn’t necessarily need the money. the rental market is on fire here(because all of the multiunit owners are selling for a fortune in a hot seller’s market). he could, in my opinion do better.

my intention is to create cash flow. i want to buy and hold the buildings and rent them out with a post-expense positive of $500 per month.

how do we do it?

california creative real estate challenge - Posted by copie

Posted by copie on June 01, 1999 at 18:48:30:

i have a challenge for all of you creative real estate wizards out there in cyber space.

i live in the san francisco bay area and was told that creative financing wouldn’t work in this market because the prices are too high to buy right.

i have come across a property in the burbs here that i’m very interested in and i would like to ask you EXACTLY what offer YOU’D make to the seller to put this together.

here’s the deal…

the property consists of 2 houses on one lot. the first is a 4/1 1400 square feet. it’s occupied and rents for $995. fair market in this area would be $1200-$1400 per month.

the back house is a 2/1 approx. 600 square feet. it’s vacant and had been renting for $750. $850-$950 would be fair rent in this market.

the propert is free and clear. the owner is asking $215,000 for the whole thing. The property is worth about $250,000 in this market. the agent says he may carry a second. he hasn’t been approached yet about carrying a first.

how would YOU buy this property? i want to do this no money down and WITHOUT having to approach a bank for a loan.

i want to make an offer by friday 6/4/99. i’ll choose the best plan and let you all know how it worked.

one thing on this challenge…no lectures about the biz. no telling me how it can’t be done. let me know your best creative idea for obtaining these buildings.

Re: california creative real estate challenge - Posted by Richard M. Roop

Posted by Richard M. Roop on June 01, 1999 at 23:24:00:

I flip properties.

1.) I’d offer $215,000 (full price) with owner carry 1st of $202,000 @ 7% over 360 mos paying $1343.91. Seller gets $13,000 down (enough to pay realtor). Close in 30 days.

Then, advetise to find a buyer “No Qualifying Owner Financing: Two rental homes. Positive cash flow. $250,000 with 10% down.” Close similtaneously.

Pay seller $13,000 of your $25,000 down. Pay seller $1343 each month but collect $1651 from your buyer each month. Wrap your note. You’ll have no vacancies, no repairs and no landlording…just $12,000 cash upfont…and $298 a month positive cash flow…plus a $23,000 equity spread between what you owe and what is owed you.

2.) Or offer $215,000 with $25,000 cash plus $190,000 owner carry second. Get a hard money 1st of $30,000 at 16% interest only, or $400 month. Pay seller $1,264 on 2nd at 7% over 360 mos. Then sell for $30,000 down (no qualifying) or keep it. The extra $5,000 from the 1st covers any of your expenses.

3.) Or offer $191,500 cash. Sell your contract for $8,000 before your closing date. It’s worth it.

  • Richard M. Roop
  • Woodland Park, Colorado

Re: california creative real estate challenge - Posted by mike

Posted by mike on June 01, 1999 at 22:21:45:

so what is he going to do with the money??? sounds like a tax liability to him on sale. offer him a 1031 exchange into something he can sell off a little at a time. solve whatever his problems are. plenty of room to borrow on his/your equity. get creative, after you ask him what would work best for him…

Re: california creative real estate challenge - Posted by Tim

Posted by Tim on June 01, 1999 at 20:05:17:

Hope this doesn’t sound negative, but you have not told us two very important pieces of information:

  1. What does the seller need?
  2. What are you planning on doing with the property once you have control of it?

Until those things are known, it would be near impossible to tell you what might work.