Newbie, needs help fast!! - Posted by NZBattle,NC

Posted by DanM(OR) on March 05, 2000 at 18:57:10:

NB or NZ,

It doesn’t seem like there is a deal here. You are paying too much for this house and the terms aren’t all that good either.

Often times people know better, but when they are thinking about a house for themselves they lose their minds and go for the first deal that comes along.

I am sure that there are better deals where you are located.

Not to sound harsh, but it also seems you have a lot to learn before you get into this. Read the articles here before you do anything else. I am sure it will take you a day or two, but it will save you a lot of money and time wasted.

Best of luck to you!

Dan Matejsek

Newbie, needs help fast!! - Posted by NZBattle,NC

Posted by NZBattle,NC on March 05, 2000 at 17:01:53:

Hi, I am very new at investing, I have been reading a lot of information and I am in the process of making my first deal however I really need help and fast here it is, I found a house and the market value of the house is 12,200, I found the seller and he wants to sell for 15,000 however he is willing to sell on a lease option but he wants 2,000 down $200.00 a month for 24 months and the remaing balance to be paid at the end of 24 months,the house is not bad looking at all but will require about 2,000 to bring up to living conditions the promble is I don’t have the 2,000 down for this deal I thought about offering him more for the property if he would come down on the price of the down payment Please help me if there is any thing that I can do to get him to drop his payment please let me know I forgot to mention that the house has only two bedroom one very large one and a very samll room. Please someone give me some advice fast I will be giving him a offer in the next two days. Thanking you in advance NBFrom, NC

Could you restructure… - Posted by David Alexander

Posted by David Alexander on March 05, 2000 at 20:37:04:

As Dan said where’s the Deal? Unless you could restructure it to make it a good deal. First and foremost what could you re rent it for? And if your going to pay full price get some rent credit, I’d ask for 100% meaning that your 200 a month applies to the balance owed. And when negotiating the 2k down wont fly to much for a low end property like this. I would say somewhere around 500 max, especially with the work needed.

Also negotiate that the 2k fix up will go directly to principal too, or use that to negotiate no money coming out of pocket because you need your money to fix it up.

Now on to where to get the money. You get the money from your buyer of course, rule 101 of Investing is someone else pays your debt.

So it might come out looking like this. You structure a deal to buy the property for say 500 down, plus fixup of 2k and you get full credit for it, you also get credit for 100% of your payments.

Now you find a buyer with 1000 down that will do the work, and give them full credit for the work also. You sell to another buyer for say 1000 option money, lease of 250 month, with an option to buy at 18k.

You get your 1000 from your buyer goes to your seller, you pocket 500.

You now owe 14,500. You pay 200/month and get 100% rent credit are 2400/year for a total of 4800.

Plus your buyer should fix the property giving you another 2k credit at least.

So all said and done you’ll still owe 15,000 -(500 down, 2k fix up, 4800 rent credit) = $7700

Your buyer will owe you 18k -(1k down, 2k fixup) = 15k

During that time you will have collected 50/month for 24 months or $1200 and 500 from the down for a total of $1700 plus a backend of $7300 for a profit of 9k.

Not too shabby of a “1st deal” if you could pull it off. Although, you have to realize that the investor selling you the property probably bought it for a whole lot less. I’ll be honest you should be buying wholesale or close too it and I wouldnt do this deal unless I already had another buyer lined up to buy it.

David Alexander

Question - Better answered on the Main Board! - Posted by Terry Vaughan

Posted by Terry Vaughan on March 05, 2000 at 20:21:16:

This question would be better on the Main Board:

This forum is primarily for discussions about “paper” concepts.