First Deal Big Success…Now what? - Posted by Jay P
Posted by Jay P on March 21, 2002 at 12:59:47:
This is a two part post. First, my success. Last October I decided to look into getting more rental property (I had a rental townhouse already). I decided to go the traditional (realtor) route for fear of not doing something right or getting into a complicated transaction that I wasn’t ready for. I got lucky one day when I called on an ad and the house I called on wasn’t what I was looking for but that the realtor had one that was just about to be listed by him. It was a split foyer with three separate units in it. 3br $900/mo rent, 2br $600/mo and 1 br $475/mo. The asking price was $149,900 (more than I expected to spend on my first deal) but I decided to look at it. With the market being so hot in my area, I knew I had to make a decision quickly and make sure that I got the house. At the time, my wife was a loan officer and I got a 5% down loan at 8.375%. I payed full price for the house but had the current owner fix everything to get it ready to be rented (I later replaced the carpet in the 3br which cost me $1500 that I should have asked them to do). They even painted the entire 3br. To re-cap, I paid full price but now have a rental that brings in $500-600 positive cash flow each month. This wouldn’t have happened if I hadn’t taken action and picked up the phone. For those that don’t know what to do, just do something! You may just find a diamond in the rough by luck.
Part 2 - In this strong sellers market, you simply don’t find good deals through the traditional channels (mls). On top of that, my wife decided she was burnt out in the mortgage business so she is taking off for the summer. Of course, she now wants me to stop spending money. I have been reading the posts on this site for over 6 months, so I have a decent overall knowledge of the different options of making money. I think the best bet in this market is to find very motivated sellers before they get to a realtor. I could do this by advertising as mentioned in the posts, etc. My concerns are #1 I see alot of responses regarding different methods (ex. lease options) but how does an inexperienced investor get the correct paperwork completed without risking a huge error? #2 Are there certain methods that are preferred during “hot” markets? #3 Qualifying for a loan(even with high credit scores) will be tough without two incomes (Although I do have a $50,000 equity line ready to be used)
Any help or comments would be greatly appreciated.