Posted by ED on January 20, 2000 at 23:32:38:
Hi Mike,
Simple question. Since you are planning on renting it out in the future you may want to look further on the rentals in your area, get some comps. and see if the deal still makes sense.
I wish you success,
Ed (Killeen T.X.)
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.
Mike
Re: First Deal…I need Help, Advice and Answers!!! - Posted by Ray S(FL)
Posted by Ray S(FL) on January 20, 2000 at 23:47:52:
Mike,
Anytime someone starts talking about going and qualifying for a loan it scares the hebegeebees out of me.
I would find out when the listing expires first of all. Then I would try to find a way to L/O or buy on an Agreement for deed. If they are truly about to be in Foreclosure then they would probably love for someone to just make their payment for them. You might even could buy this one “subject to” if you can get the realtor out of the way.
I think it is a great investment if you can get some good terms. This is a highly motivated seller who is probably praying at night for someone to come and solve their problem. Be that man. If you can’t, can I get the address?
Good Luck to you!!
Ray S(Fl)