My second deal - could anyone help? - Posted by Lib Cassin
Posted by Lib Cassin on March 22, 2000 at 05:31:31:
I have only been with this site for 2 weeks, but it has already given me the guts to actually make an offer.
This will be my 2nd investment property and so dont laugh, please, but well, here is my story!
I read Carlton Sheets 2 years ago, and within a month I found a duplex, 2 units for sale by owner within 5 minutes of my home, and in a word, I bought it! Within 40 days, I had closed escrow on my first deal, and I was absolutely delighted with myself.
Then I began to examine my great deal and try to learn how to do better and I found I was All wrong, in terms of financing, I had put 30% down, and got a mortgage for 107,000, for a total price of $154,000. the local experts said, crazy, you over-paid, yeah, yeah yeah, but any way, I did it and my gut level was strong that I had a good deal.
Summary of my first deal? When someone with experience meets someone with money, the person with the money usually ends up with the experience and the one with the experience ends up with the money!!!
So onward, albeit a little gunshy!
Two years later, my gut level was right, by cricky, I paid 154,000, I got an offer of 175,000 for it this year, and I am collecting $1,600 a month in rents, no maintenance and I have close to 450 a month positive cash flow after all my payments are made! So, I learned, and I did OK!
So maybe I could have done better, but I will work on that.
Now, deal #2! Can you advise me please?
I have found a little SFR within 4 blocks of the duplex, and again, my gut level kicked in after looking at it. I have looked at a lot of other properties and not wanted to deal on them, but this one works for me, tho I am not sure why for sure. I hope my comfort level is not predicated on 5 minutes from home!
It is in great condition, tho the roof needs a coat of sealer, but I am yet to find a home inspector to tell me for sure if it is as good as it looks. The seller asked for $97,500 and they would replace or redo the roof. I countered with 93, and I would fix the roof, they countered, 94, I countered and they accepted 93,500. And I have been preapproved for a 95% loan at 8%. Tho now I am having trouble getting calls returned from the lender??
Now, I need to maximise this opportunity for cashflow and would love to explore L/O - but am not sure how it all works. Rents in the area are 750 - 800 a month, I think I can get 850 - 900, but what would be the best way to go with this. I just know I can flip it for 110,if I go about it right? So, what would be best, my primary goal is income, secondary goal is capital appreciation.
Any advice/suggestions or encouragement would be most welcome, especially from Bassman.