I have not yet pulled the trigger on my first deal but this is what I think.
The seller doesn’t seem very motivated yet. Did you find out when he is moving into his house. He may get a lot more motivated as that date gets closer.
It looks like you have a lot of things you can point out that need fixing, “You were going to fix that before you left weren’t you?”.
I would just wait and see if he get real motivated and will take around $1000. If not, just keep looking.
It’s like Lonnie says, “They have to sell but you don’t have to buy”
Posted by Sarah (TX) on August 10, 2003 at 16:10:26:
My business partner and I were driving through a MHP when we found a 20 yr. old single wide 2/1 for sale for $7000. The owner was there and we took a look inside. It was pretty bad, very much a bachelor pad. There was no carpeting, looked like they attempted to paint the kitchen and then stopped 1/3 of the way through, bathroom has plywood sheet for a counter top. The a/c was not on (said he turned it off because it’s too expensive but claims it does work). Owner said he needs cash to move into his new home, will take $6000 if I could get him cash right away. We decided to let him stew a bit and see what happens. Since this is our first deal, we don’t know if we want to take on all of it’s problems (although they do all seem to be cosmetic so far). It’s still for sale and we have a feeling that he might take $2000 if he gets really desperate. We’re a bit scared about taking on something that might be beyond what we can handle for our first deal. And what would you sell it for? Try to sell it for the $6-7000 that he originally wanted but finance it ourselves? We did read Lonnie’s DOW but we’re in analysis paralysis. Would you touch this one the first time out or walk away? Thanks for any advice in advance.
Re: First deal or walk away? - Posted by Phil Pelletier
Posted by Phil Pelletier on August 11, 2003 at 19:57:26:
Run away, unless you can get the place for $500. You laugh, but motivation is a very tricky thing. He is probably looking at his $7,000 tax assessment value records and thinking he has an asset, when, market-wise, he has a liability. When the hard deck of his closing date looms, he will bail on that place quick.
HOWEVER! It does not mean you need to jump right in. There are plenty of people with homes in better shape and in the same position as he is motivationally. They want to dump homes that are in GOOD shape to someone with cash.
Phil Pelletier
PS- For what it is worth, here in Oregon, I have stopped buying any two bed homes at all, unless I can sell them before I actually buy them. I HATE holding on to two bed places and paying rent while i search for a buyer. The rent market is so soft here, apartment owners are giving away huge items to get people to take small apartments. Tough competition. I try to stick to three-bed homes. Suit yourself, but don’t make his problem yours.
Re: First deal or walk away? - Posted by Greg Meade
Posted by Greg Meade on August 11, 2003 at 10:15:13:
before i get blasted for the pre-hud remark i apologize, my subtraction skills are very low in the morning. Sarah this home is hud approved but i would still not over pay…repairs are time consuming and costly.
Re: First deal or walk away? - Posted by Greg Meade
Posted by Greg Meade on August 11, 2003 at 10:06:14:
Have done two lonnies…one with no repairs, one with repairs and i would stay awat from this unit unless you can steal it (500-700) It is pre-hud and i would market as handyman special. Terms maybe 750 down 250 per month at 12% for 24 months. Have an exit strategy of selling for 1500 cash if you can not sellin 30 days.Texas is a booming place and affordable housing is hard to find. Your exposure is small if you structure this deal like this! Good Luck