Posted by Ed Copp (OH) on May 22, 2000 at 08:05:03:
Matt,
If the rental market is $500 per month where will the money come from to service the mortgage note(s)? You mentioned that you do not want to use any of your own money. You or somebody will have to get a part (or full) time job on the side just to support the house.
The seller of the occupied house is only slightly motivated. She said he wants to eliminate the one hour commute to work. We don’t know if this is true or not. He may just enjoy the drive who knows? The one hour commute may really be only 35 minutes. My point is we really need to find out why they “might” consider selling. Then we need to find a deal that will produce a positive cash flow. $500 coming in will not do it for a $100,000 loan…ED
Where do I start, anyone want to help? - Posted by Matt Crane
Posted by Matt Crane on May 21, 2000 at 21:47:10:
I have been reviewing this site recently and today decided to see what was going on where I live. My wife and I drove around are small town and discovered a realtor’s sign in the yard of a new house in a nice neighborhood. The sign read, “Immediate Possesion and Reduced”. We noticed a neighbor and I decided to do some investigating. Gayle (neighbor) informed me that the house next to her had been built by four gentlemen and after completion had remained on the market for the past year with an asking price of about 130,000. She then informed me that she was wanting to sell her house and her husband didn’t like realtors, they had attempted to sell about 6 mos ago with little luck. They want to sell due to her husband’s job, which is about an hour away. She informed me that it appraised at approx. 110,000 and immediately told me that they would take about 105,000 or best offer if I was interested. Of course this was without her husband being there so that leaves a big question mark. Well anyway, my whole point is I have no idea where to go with this, I don’t have the experience or knowledge of how to turn this one over and I am requesting anyones help to learn what to do and to put this together.
Re: Where do I start, anyone want to help? - Posted by JohnBoy
Posted by JohnBoy on May 22, 2000 at 01:21:55:
What would your plan be to do with the house?
Live in it yourself?
Rent it out?
Re-sell it to make a profit?
Lease option it to a tenant/buyer?
What does a house like this rent for in the area?
If you were planning on getting your own financing to outright purchase this house then $105k on a $110k house would not be a deal.
Does the house need any work? What condition is in?
Assuming the house was in excellent condition and needed no work done to it and you were going to purchase it by getting your own financing to cash the seller out then the most you would want to pay in this case would be 80% of the appraised value. That would mean $88k would be your best offer. But without knowing what your plans for the house is we can’t help you in figuring out a way to approach this. What is the game plan?
Re: Where do I start, anyone want to help? - Posted by Matt Crane
Posted by Matt Crane on May 22, 2000 at 05:36:25:
Johnboy, I want to do whatever I can to make some money from these properties without investing my own money. Obtaining the properties and reselling for a profit would be my best scenario. These properties could easily rent for $500 a piece. I don’t want to have to get my own financing, but I smell potential money in these properties. I just don’t know the nuances of this business to go about doing it.
These aren’t fixer uppers, these are brand new homes, one is about 4 years old and the other is about 1 year. I live in a somewhat rural farm and industrial community. These properties are about two blocks from the local schools (High School, Middle, and Elementary). Specifically, as stated above, I just want to middleman this deal and make a cut if that appears to be possible. Any help would be appreciated and terms could be worked out if anyone would want to work these properties. Mainly, I just need to know if this is worthwhile to chase and if so what are the steps involved?
Thanks for a quick response JohnBoy.