Rich Dad to be, Poor Dad to be! - Posted by Rich

Real Estate Investing Office
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Posted by Rich on December 05, 1998 at 22:38:18:

I’ve looked under the cushions already. House number 1 is due to close on Friday, and I purchased it with the contents included (some nice antiques), and the demolition crew is starting work on Monday, and unless I can swing the other 10K, I’ll be paying them to do demolition on a house I don’t even own. I am having an auction of the contents of house number 1 on December 19, which should net between 7k and 10k, and hopefully more. If I could borrow the $10k from the bank for about 2 weeks, I should be able to pay them back with the proceeds from the auction, and then finance the rehab. I’m not familiar with a 201k, or who offers them. Any more ideas are always welcome…even humorous ones. - Rich

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Rich Dad to be, Poor Dad to be! - Posted by Rich

Posted by Rich on December 05, 1998 at 07:24:11:

Help! I’m a ‘father to be’ who’s trying to create a real estate nest egg for his future family. About 3 months ago I found a nice old home that is in a great location (historic district - and among other more expensive homes) but is in need of a fair amount of repair. The current owners are a non-profit group that typically does rehab for low income housing. This property was donated to them. They began demolition of some of the rear of the property that had been added on over the years. The rear had been a mishmash of architectural styles and looked like hell. So they started to tear it off. Unfortunately, they ran out of money to finish domolition and start the rehab, so they let it sit, for the last year. The city has threatened them with taking the property (they have a court order ready) and tearing it down, and turning it into a parklet. I found out about the property, and contacted the owners. They have an appraisal of $42,500 ‘as is’. I offered them $10,000 for it. About 3 months have passed, and the owners just called me to say they would except my offer. But I need to act fast. The city has called off the dogs, for now, but want me to finish the domolition and do the outside work to get it looking acceptable ASAP. I have contacted a demolition company, and they will complete the demolition for $2,000 and they can start this coming Tuesday. I have also contacted a friend who’s a contractor who said he can replace the roof, and windows, put on new siding, soffit, facia, spouting, shutters, build a new front entrance, for $24,000 and can start next Wednesday. I have my attorney doing a title search and he said he should have it by Monday, so, if it passes muster, I can close on the property on Tuesday. The property needs another $10,000 to $15,000 on the inside to be complete. It was originally built around 1860, and has some great features, including pocket doors, a super tin ceiling in the dining room, hardwood floors, and a good location - in the historic district (tax breaks) among homes in the $100,000 and up range. It is zoned residential/office, so it could make an ideal professional office building, for an accountant, doctor, lawyer, etc. It is about 3200 sq. ft. on 2 floors. Now, here’s the rub. I’ve been holding $10,000 for the closing on another property I’m about to purchase and don’t have another $10,000 to buy ‘this old house’. Where’s Bob Villa when you need him? Anyway, if anyone has any suggestions or ideas, I have until Monday to come up with something. I think if I could come up with the $10k, my bank might finance the rehab. If anyone wants to see some photos, of the property, as it is, and the proposed renovation, feel free to email me. Thanks to one and all, and have a happy holiday. - Rich

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Re: Rich Dad to be, Poor Dad to be! - Posted by Ed Wachsman

Posted by Ed Wachsman on December 05, 1998 at 08:14:16:

You don’t explicitly state that the closing must close by Tuesday and you don’t state at all when you need the second $10,000 to be available so some of the following may not be practical. I’ve included them on the chance that you don’t need the entire $20,000 cash to be in hand by Tuesday.

Ask the seller to take some money now ($2,000?) and take a note for the balance, ask the seller to sell for $1.00 today and give them a note for more than $10,000 payable later, Credit Card cash advance, consumer loan on vehicles or other personal property, sell a vehicle or other personal property, equity line against your residence or other property you may own, loan against 401K, borrow from family or friends, sell an interest in the deal to your contractor friend or other friends or relatives, get the contractor to take a note for part of his job, sell a note or a partial in a note that you may have, sell the cash flow from leases or land contracts you may have.

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Re: Rich Dad to be, Poor Dad to be! - Posted by SCook85

Posted by SCook85 on December 06, 1998 at 18:46:04:

Instead of asking the bank to lend you $10,000 for two weeks ask the sellers to lend you $10,000 for one year. Tell them exactly what you told us. It sounds to me like they don’t have much of a choice. If they take back a note you can pay them with the proceeds from the auction. If they knew the whole situation they would probably be willing to work with you. It’s worth a shot. Once they finance the property you could seed a refinance or a second mortgage for the rehab.

SCook85

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Re: Rich Dad to be, Poor Dad to be! - Posted by Rich

Posted by Rich on December 06, 1998 at 08:37:11:

The house I’m holding the money on, closes this Friday. I’m buying it completely furnished, including some nice antiques. I have lined up an auctioneer to do an ‘on site’ sale on the 19th of Dec. If I can get the bank to give me a 30 day note for the $10,000, the proceeds from the auction might be enough to pay it off. I will have the $10,000 needed to buy the ‘rehab’ property, and then refinance to do the renovation. How does this sound? Thanks. - Rich

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Re: Rich Dad to be, Poor Dad to be! - Posted by Rose (San Jose, CA)

Posted by Rose (San Jose, CA) on December 05, 1998 at 21:13:02:

Geez, Ed. You left out searching under the couch cushions for spare change.

Rosie

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Re: Rich Dad to be, Poor Dad to be! - Posted by Tonya Brown

Posted by Tonya Brown on December 05, 1998 at 13:04:16:

Try a 201k loan that will help you get some repair money.

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Re: Rich Dad to be, Poor Dad to be! - Posted by Ed Wachsman

Posted by Ed Wachsman on December 06, 1998 at 16:31:40:

As long as your going to ask the bank, I think it would sound better if you asked them for a longer term. Why box yourself into 30 days? Real estate is very prone to providing examples of Murphy’s Law. It ain’t pretty when Mr. Murphy shows up.