The fact that the man paid $62k in '92 and is now trying to unload it for $50 should tell you something-like this is probably the worst deal you could ever make. First of all $525 from a Sec.8 (welfare) tenant, barely pays the mortgage. You can’t imagine how much wear & tear Section 8 tenants (or any tenant for that matter) can inflict on a house.
Put the calculator back in the box until you learn some basics of owning and operating rental property. Just looking at numbers will get you into trouble.
Posted by Art Montano on April 18, 1999 at 19:56:25:
I am making an offer that looks like this. Here’s the senerio: Seller wants- 50000
5000 dn
45000 bal
Their payments are 440mo
I offer 45000
2000 dn
43000 bal 7% 30yrs 279.43mo
6yr balloon
Since seller pays 440mo. I’m thinking of adding 160.57mo making total payment 440mo. This 160.57 is to accumulate for six years and deducted from principal amount. Problem is I have a new financial calculator (which I can’t figure out) that brought no instructions, so I’m lost. What I’m trying to figure is how much would the principle be at six years? 160.57x60=9634.20 9634.20 deducted from principle would = ?
The house is occupied by section 8 tennants which pay 525mo. House sold in 7/92 for 62,180.
Is this a good deal since I have no experiace with section 8 tennants?
Doesn’t look like there’s any money to be made on the cash flow because there is no room for maitenance etc.
I have a similar property that I bought as a rental, I keep waiting for the tenant to move out, so I can sell, cringing every night before I go to bed hoping nothing goes out before I sell and carry the paper.(Then again I’m a chicken when it comes to tenants and toilets, and I like the fact that if someone asked me for a resume it would say “I HAVE NO JOB”.
So with that said, what is the FMV currently, not from 2 years ago. Does it need work. Can you get the tenants out and sell immediately to make a profit.
Posted by Bill Taylor on April 18, 1999 at 21:43:49:
Hi Art good to see you are getting active. This guy is probably losing some money on this deal. SOmetimes they will help you buy the property if you can help them out. I had a situation once that this guy wanted me to buy this house. The deal was the payments were 275 per month and the rent was 250 per mo. The rent should have been 325 at that time. He wanted me to buy this house but I kept asking him how that was possible since I could not cover the neg. I was facing per mo. This also did not include the 50 dollars for tax and ins per month. He would keep asking me from time to time. Again I would ask how it would be possible. He wasn’t sure but he sure wanted out. Again he sked me and I told him I didn’t see any way. He proposed he pay me 100 dollars a month for 2 yrs to take care of neg cash flow. I thought for about 30 sec. on that one and took him up on it esp. since the second mort of 144 fell off in two yrs. So if this guy wants out bad enough he might be able to help you, you might be surprised. Good luck and its good to see you have been active since the convention. If there is anything I can do for you don’t hesitate to e-mail me. Take care Art