Posted by Steve on February 18, 2002 at 20:05:26:
Seven vacants and two non-paying properties? Ouch. Now I can see why the experienced guys say to have a good cash reserve when doing Sub2s. Thanks for clarifying those points. It’s good to hear real world scenarios.
wanted to share a warm moment… - Posted by TRandle (TX)
Posted by TRandle (TX) on February 15, 2002 at 21:38:24:
I bought a house a month ago Sub2 and my seller (single man) was moving out yesterday and today. I lined up some TBers. The TBers wanted the weekend to move and I offered them a $100 discount on next month’s rent in exchange for them doing their own cleaning.
I called my seller to hook up for keys and some papers and he informs me the TBers are at the house. I had explained earlier today to the TBers that the seller would need the evening to finish up.
Anyway, I tell the seller I’ll be right over and I take off, all the while wondering what might be in store.
When I arrive, the seller stops cleaning the kitchen counters and walks up to greet me and shake hands. The husband TBer is going to town with the vacuum in the living room and waves a big hello. The wife TBer comes out of the bathroom with her rubbers on (she’d been scrubbing toilets and tubs), removes one of her Playtex gloves, and gives me an enthusiastic handshake. The daughter of the TBers sheepishly peers out of one of the bedrooms and smiles, taking a break from using a broom on the ceiling fans.
It was a strange moment and I almost felt as if I was the one out of place. Complete strangers working together toward the same end goal and everyone was smiling, almost enjoying the work.
The seller is happy as can be he won’t have a foreclosure on his credit and informs me that he’ll be faxing his testimonial over from work next week. He’s also happy I found a nice family for his house. The TBers were stoked they get a nice house with an option to buy, considering their credit. And it’s an okay deal for me, too.
There was something very human in those few moments and it struck me pretty hard. I needed a reminder of the meaningful reasons I do REI and I thought you might to.
Re: wanted to share a warm moment… - Posted by MoniqueUSA
Posted by MoniqueUSA on February 16, 2002 at 18:19:51:
Great story.
And it’s cool that you moved the house so quickly.
No holding costs. I love it when that happens.
MoniqueUSA
Re: wanted to share a warm moment… - Posted by JoeM.
Posted by JoeM. on February 16, 2002 at 14:42:01:
GREAT story TRANDLE! thanks for taking the time to post that. Would you mind sharing the numbers? thanks and happy investing
… - Posted by JHyre in Ohio
Posted by JHyre in Ohio on February 16, 2002 at 06:48:15:
Doing well and doing good…what a business!
John Hyre
Re: wanted to share a warm moment… - Posted by lucky
Posted by lucky on February 16, 2002 at 24:52:29:
Thanks TRandle
I had something like that happen today , I sold a house 2-days ago, and the soon to be owner brought his 5or6 yrar old daughter over and asked if she could see the house,as they were walking throuhg it I heard the dad say ,this is your new play room,this is your new bedroom etc.Then as they were leaving he complemented me on the work I had done.
WOW what a great feeling of giving something back.
A real WIN/WIN
JUST MY THOUGHTS…
LUCKY IN KY
Re: wanted to share a warm moment… - Posted by Kristine-CA
Posted by Kristine-CA on February 16, 2002 at 24:18:43:
Tim: thanks for sharing that. Something very human…it’s so easy to stray from those kind of thoughts and moments in the bustle of getting business done. It’s people that buy and sell houses and live in houses. And it’s people that have debt and get foreclosed on and get stressed out. And it’s people who invest in houses and try to make a buck. We are all people. Thanks for a wonderful story with an image that puts us all in the same boat for a minute.
Sincerely, Kristine
Thank you, Tim. I needed that. NTXT - Posted by Brent_IL
Posted by Brent_IL on February 15, 2002 at 21:56:00:
nt
Re: wanted to share a warm moment… - Posted by Paul S
Posted by Paul S on February 17, 2002 at 15:30:27:
That’s what it’s all about. When you think about it, the creative investor is really helping people and communities. Homes like the one you described could just as easily sit empty and deteriorate on some bank’s REO list. The man you saved from forclosure could be just another statistic on the bankruptcy rolls. The family you are helping to own the home are doing something the traditional system would have denied them. Instead you helped someone in genuine need own a home of their own, you enhanced a community that would have had the empty house sitting and rotting, you helped the seller by giving him a second chance to manage his financial situation. The system of banks, real estate agents, and traditional buyer/sellers is strong and works most of the time. But there are times when there are needs that simply cannot be met in the traditional way- and that’s why we’re all here- that’s our specialty. Some of us will get discouraged and quit because we don’t make a fortune overnight, but others of us will become passionate about CREI and we will learn, grow, help others, and become very wealthy in the process. Here’s hoping you stay in that last category.
Re: wanted to share a warm moment… - Posted by TRandle
Posted by TRandle on February 17, 2002 at 17:08:20:
Joe,
Here you go.
Arrears was 4k (wasn’t posted for foreclosure yet)
Seller paid 1k and I paid 1k up front (after closing)
remaining 2k spread over next three payments
seller stayed half of Feb and paid $500 rent
loan balance is 90k
payment is $960
TBer option fee was $1,000
TBer Feb rent approx $500
monthly rent is $1,175
option price is 120k
HTH
Clarify a point or two - Posted by Steve
Posted by Steve on February 17, 2002 at 22:39:57:
When you say the remaining $2K in arrears was spread out over the next three months, do you mean the lender allowed you to spread it out to bring the loan current, or that the seller was paying that to you? In other words, other than the original $1K the seller paid to you at closing, who is making up the arrears, because if not the seller, then I can’t see how you are making any money up front? Or maybe you are only going for the back end?
Also, a $1000 option fee sounds low compared to the 3-5% I hear preached. What is your philosophy on this?
Thanks.
Re: Clarify a point or two - Posted by TRandle (TX)
Posted by TRandle (TX) on February 17, 2002 at 23:30:38:
Steve,
Yes, the lender wanted half now and half over the next three months. No, the seller is not paying anything other than the $1,500 he’s already paid. No, I’m not making anything up front.
Yes, I’ll pay approximately 2k spread over the next three months for $200+ per month and a 30k backend.
At the time this happened, I had seven vacant properties and two non-paying/late-paying tenants. I’ve been carrying a number of properties for quite some time and I got tired of it. The folks with cash disappeared for about 6 weeks and only recently resurfaced with tax refunds coming.
As far as my philosophy on the option fee, yes it’s advisable to stick to your guns, if you can afford it and if it won’t cost you more in the long run. In my limited experience, you’ll end up with higher quality tenants that way.
I’ve run across few “textbook” deals as the gurus detail. Each deal is at least slightly different and cash needs will frequently dictate my course of action, which may be contrary to the “conventional creative wisdom” freely espoused.
There are no hard and fast rules in this biz, only guidelines, and even those can vary by market.
As a side note, it was probably less than a year ago that I semi-jumped on one of my friendly competitors for considering accepting less than 3% up front. I later told him in private that I had done it myself, but that I didn’t think it was a smart move. I still don’t.
Hope that helps some…