First Deal…I need Help, Advice and Answers!!! - Posted by Mike
Posted by Mike on January 20, 2000 at 22:20:33:
I have been studying REI for some time, and started with Carlton’s course and have read all the web sites…and now, I want to make my first deal, but need advice and guidance.
The property is valued at $100,000 and is close to going to foreclosure (so the realtor says). It has been on market for sometime at an asking price of $101,000. The selling realtor has told me that since the owner (going through a divorce) is now about to get into foreclosure, she thinks she can get it sold for about 80% or $80,000. The existing mortgage the owner holds is a VA 30 year fix, and the realtor says she thinks they (the VA and owner) will take as little as the 80% to stay out of foreclosure, and put the VA compromise on the current owner. Is the realtor being upfront about all this? and how can I check on it?
The property is a 3/2 Single Family property with pool in central Texas, and others in the neighborhood have been selling for $110,000 to $120,000. I am looking to live in this house initially and then rent it out when I move in about a year (I am in the military). The rental market here is VERY good, and similar houses are commanding about $1000 to $1200 a month. The house will need some work, I estimate about $5000 to $8000 dollars total. If I can get a contract excepted at 80% to 85% the value, will convential mortgage lenders loan a VA for 90% LTV? And if not, who would? (also considering that my front end ratio is about 14% and my back end ratio is 54%) I have no savings to invest in the down payment or the fix up, so I will need the extra mortgage. Is this even a good investment? My gut feeling is telling me yes!! If I cannot buy this property myself, how could I structure the contract to sell it to another investor?
Also, I am currently renting myself, and the landlord has had a breach of contract, and I am trying to end the lease early due to this. How can I structure my bid/contract (assuming the sale price is accepted) to allow me time to get two things: (1) enough time to get out from under my current lease and into the house/mortgage payment seemlessly, and (2) enough time to find adequate financing? Are there any particular clauses I should include to give myself “outs” in case I cannot reach my above goals? How will the “impending” foreclosure effect these things?
I really appreciate any advice and help anyone can give me. I want to get into my first deal and stop the “analysis paralysis” but I also do not want to get in over my head. Thanks in advance.