Re: Sheets method does not work in NYC - Posted by Rob FL
Posted by Rob FL on November 20, 1999 at 21:44:50:
Here is a tip. Look for motivated sellers. Normal sellers won’t do no money down deals. Motivated ones will. Here are two examples.
I bought a duplex for no money down. The duplex was fully rented, but the landlord was in foreclosure. Why was he in foreclosure? The duplex had a balloon mortgage on it and the balloon was already 6 months past due. The owner had bad credit and could not refinance. He ended up selling me the property for just simply taking over the payments. I ended up refinancing the property with Nationsbank. FMV=90K; amount I acquired it for (amount of the loan in foreclosure)=65K; new loan after acquisition=70K.
Another example, older landlord wants to sell a SFH. I had sent her a letter regarding the property and she responded to it. Because she had owned the house for 20 years and had paid off the 1st mortgage, she would have a huge capital gain. My letter told her I would be interested in buying if she would give me owner financing. She would with 10% down. Where did I get the 10%? Visa. Sales price=67K; Owner financing=60,300; 2nd loan from Visa 6,700. Since I was able to negotiate a nice 7.5% interest rate with the seller, I now have it rented for $150 a month positive cash flow. Once Visa is paid off in about 2 years, it will be around $230 a month positive cash flow.
Tenants and toilets are sometimes made out as a big bad deal. All it takes is a strong lease, a little knowledge, and some creative landlording to get by. For instance, I always make sure my tenants are “handy.” Why? Because my lease requires them to pay the first $50 of any repairs each month. That house I just described that make $150 a month profit, how many times have I been out there since the tenant moved in last November. Twice. Why only twice? Becuase the tenant makes all the minor repairs. The major repairs get made by my handymen.
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