Posted by Shenesa on April 19, 2000 at 14:26:35:
Thanks for the advice Phil!
To answer your questions: It is a FSBO and was listed with a realtor two years ago. I would be more than willing to put a $500 deposit down, but I am just starting out and I only can afford $50. I have read that some investors have only offered $10 as a deposit. If they don’t request a deposit, I will not bring it up and if they do, I will offer the $50.
Again,Thanks
Looking at a SFR tomorrow - Posted by Shenesa
Posted by Shenesa on April 19, 2000 at 13:55:59:
I called on a SFR in my neighborhood and found out that the owners are elderly, moved out two years ago, don’t want to landlord, was on market 2 yrs ago for 35k,3brs, 1ba, eat in kitchen, dining room, garage, small yard, taxes are 900 yr, own free and clear, new roof, rented, tenants pay own heat, rents for $400 a month asking $15k. What advice can you give me on this. I plan on taking a contract with me and $50 ernest money. I will put in a few weasel clauses to protect myself.(Any advice on weasel clauses will be appreciated). I did drive by the house and it is in good external shape. The comps I did get from a realtor today for that area and style of house and they were $40-$50k.
Thanks for your help!
Re: Looking at a SFR tomorrow - Posted by Steve C., Houstonq
Posted by Steve C., Houstonq on April 20, 2000 at 11:10:22:
Looks like a sweet deal! Without knowing the seller’s temperature, I tend to agree that money talks. Upping the earnest money to $100 or $150 should help. If you don’t have the cash, perhaps you have the credit (card). Carlton Sheets to the rescue. Or just borrow it from someone.
Best of luck!
Re: Looking at a SFR tomorrow - Posted by Stacy (AZ)
Posted by Stacy (AZ) on April 20, 2000 at 01:39:30:
Hi Shenesa-
Sorry I didn’t respond to your email about this property. In my spare time I’ve been dealing with loss mitigation departments, sellers, my title guy, and my mortgage broker trying to stop a foreclosure.
Anyway, great advice below, and a possible great first deal for you. Anything that rents for $400 per month and sells for $15K is reason to get out there and see it ASAP. A couple of words…
I’ve bought every property in the past three years with $100 earnest money. Also, I’d make the contract contingent on my subsequent inspection and approval, in writing, within 15 days from the signing of the contract. Make the closing date 30 to 45 days in in the future. Then, market like heck to possible investors for a flip (I say this since I know you’re focussing on flips for now).
Also, make sure the earnest money is the sole remedy for specific performance if your have to bail-out of the contract, although, if your numbers are correct, I don’t think you’ll have any problem.
Also, don’t give any earnest money to the sellers. Instead, your contract should state that upon signing of the contract by all parties, you will pay the earnest money to a title representative (or closing lawyer) of your choice.
Also, don’t fall in love. I know it may be hard when you think you’ve got a good one, but try to evaluate with a level head when you see the inside of the house, just to be sure your numbers are correct.
I think you may have found your first one…
Stacy
Re: Deposit and funding - Posted by Lee
Posted by Lee on April 19, 2000 at 20:27:18:
Hi Shenisa
You need to make the offer all cash at $15,000, do so & I’ll back you by holding a $25,000b first. You get the difference between the 25K and 40 to 50K.
Do as Phil says, submit a$500 deposit, contengent only upon receiving a clear title and 5 business days to close. (Peroid)
Email me if you want to do it.
Lee
Re: Looking at a SFR tomorrow - Posted by phil fernandez
Posted by phil fernandez on April 19, 2000 at 14:08:36:
My ideas on your situation. If the FMV is $40,000 - $50,000 and the sellers are willing to take $15,000, I would drop everything I am doing and get over there NOW with my offer. Is this listed with a realtor? Or for sale by owner?
I would write up the contract with a deposit of say $500, not $50. The $50 deposit might insult the sellers and they also may not take your offer seriously.
You can still put in a couple of weasal clauses. The two that I would put in your offer would be a financing contingency and an inspection contingency,because at this point you haven’t seen the inside.
If the older couple have been renting out the house then they are used to receiving monthly rent checks. Why not continue that with them taking back the financing and you paying the monthly mortgage to them.