News From the Front - Posted by Carmen
Posted by Carmen on March 25, 1999 at 12:19:03:
OK, this is it. Note the new e-mail! Thought some “newbies” may be able to benefit from our experiences. And would appreciate encouragement from “oldies”.
It’s been 12 days since my husband left his frustrating J.O.B. to do this full time. I’ve been reading up and studying for a little while; he’s a fresh newbie with a lot of guts and a mission. We had 2 month’s income in the bank. I have just negotiated with my employer to let me work 6 hours a day for the same pay (in lieu of a raise). It’s sink or swim, and we are doggy-paddling like crazy.
So far we have had many nibbles, these four are worth mentioning:
One deal from a fellow investor(for which we had tentatively found a buyer already) pulled back at the last minute (“it’s yours, guaranteed, no problem, we’ll get you financed, we’ll even finance you ourselves…oh, you mean you want an inspection - sorry, sold the house to someone else”). Lesson: Don’t believe everything you hear; people may not be as “nice” as they seem.
One deal from a bird dog (62K purchase, 101K low comps, maybe 5K worth of work) where the Hard Money lender is skittish 'cause we don’t have 10K in the bank. Still working on this one. Found a contractor/partner to “show” 10K in the bank & help do the work. Waiting for call back from HML. Lesson: If needed, partnering (NOT legal partnerships!) is a good way to get things done - if you’re not too greedy, 50% of $30K is better than 100% of 0. Potential: $15K
One deal from MLS with a “tired landlord”, FMV $55-60K, was asking $49, $14K mortgage on it, gets $750/month rent, tenant has been there 3 years. No rehab; minor cosmetics. We offered $32, he countered at $42, and will take a large second, just wants to move on. Have left message, waiting for call back to finalize terms. We will try to sell this back to tenant on L/O or owner-financed (sell the note). No fix-up! Potential: 10K (after closing, etc.)
Learned big lesson from another newbie. Suggested they visit this site, so if they see themselves here I hope they don’t mind - they took a potentially good deal and are now in a bind. 2 homes, purchased at $55K each, comps at $85-90K. They began rehab, installed air conditioning in neighborhood where it is not the norm (“we heard houses sell faster”), berber carpeting, all new fixtures, new kitchen cabinets, looks like they even tried to add a new bathroom and a 4th bedroom in one - put in $10K of their own money into each home already, and their handyman never finished the work. They now have 2 semi-finished properties, for which they are paying HML $700/month each, wanted to sell to us for $74K, didn’t make sense for us. Still could make them some $ if they can finish and do a quick sale. They said they would be happy to “make $1,000 on their first deal”. Lesson: You are not going to live in the home. Do enough to resell, but don’t overdo.
Hope this was of interest. Will update if anyone is interested.
Also, please share your “war stories”! Always good to know we’re not the only ones…