Posted by Ronald * Starr(in No CA) on July 02, 2002 at 15:42:00:
MR – WI --------------------
You do what you feel good doing.
You might read a couple of property management books to gauge your feeling about being a property owner.
Another consideration is the type of renters you might be able to attract and the number. If you have lots of applicants, you can choose those that seem best.
Oh, and I did not suggest friend property managers. I meant professional property managers.
Good InvestingRon Starr******
would you do this deal - Posted by mrwi
Posted by mrwi on July 02, 2002 at 14:53:08:
I have a potential deal that I am debating on wether or not to pull the trigger on and am looking for some friendly advice. I have a good friend 1500 miles away that has an option on a 2/1 townhouse with a rare fha assum. non qualifying loan. (the one you always hear and dream about finding). Lady just wants 4k to walk and then 5k to friend for option assignment fee. Needs paint and carpet. Maybe $2500 in costs??? just guessing right now waiting for pics of inside. Loan balance is 56k, worth approx 85k fixed up. I would be into it at 65k with repairs,option consideration and 4k to owner to walk. My problem is the distance factor and the amount of upfront cash (which I have by the way) just not sure if it is worth it to tie up that much cash. My thought was to do a lease option but not sure if that is the best thing to do. Any thoughts or ideas would be greatly appreciated!!!
Re: would you do this deal - Posted by GL(ON)
Posted by GL(ON) on July 02, 2002 at 19:01:15:
It’s not bad but not sensational either. Under the circumstances your friend should settle for less.
The killer is that it is 1500 miles away. I wouldn’t even consider it if it were more than 30 miles away. You can’t do a deal like that by long distance.
The other thing that comes to mind it that if it is so good, he shouldn’t have to look 1500 miles away for a buyer. He should be able to sell it easily to a local person. Usually when they have to look that far for an investor it’s because you can smell it if you get closer.
How sharp is your friend when it comes to real estate? Can you trust him not to take advantage of you when he knows it is practically impossible for you to keep an eye on him? If so, there is another way of doing the deal that may be better for both of you.
What if you offered to go partners with him and split the profit? You put up the $4000 and he does the repairs, then either he manages it as a long term investment or you sell it and split the profits?
This gives you a man on the spot with a vested interest. The only question is, how honest is he and how good is he at following up?
You might point out that if this deal goes well, you can continue this type of investing using your money and his expertise and work. In the long run he could make a lot more money, in fact unlimited money, if lack of capital is all that is holding him back.
Re: would you do this deal - Posted by Ronald * Starr(in no CA)
Posted by Ronald * Starr(in no CA) on July 02, 2002 at 15:01:22:
Mr WI------------------
You might want to search the archives on this main bulletinboard of the CREONLINE.COM website for “condo” or “condos” so you know what to consider.
You don’t mention rental value. Would it positively cash flow with an ordinary rental, not optioned? You might want to simply hold it for the long-term.
This is pretty big out-of-pocket cash about $10K. Is it possible that the seller or your friend, or both, would accept part of their money over a period of time–maybe a year or two? This could spread out the pocket pain from cash extraction therefrom.
If you held for rental, you might consider getting a property manager for the property. You might ask fort a discount from the usual fee for single family residents, since the manager would not have to have anything to do with exterior upkeep.
Good Investing*Ron Starr
Re: would you do this deal - Posted by mrwi
Posted by mrwi on July 02, 2002 at 15:21:51:
Thanks for the response! I have thought of the idea of trying to get the people involved to take the payments over time but both are looking for the “quick cash” like most of us. Rentals in the area, according to friend, are about $750 a month, so yes it would have a cash flow of about $200 a month. I have talked to my friend about the property mangagement aspect of it as well. I guess the biggest thing that scares me is the distance factor and the amount of upfront outlay. I really dont relish the idea of “playing” land lord.
Re: would you do this deal - Posted by mrwi
Posted by mrwi on July 02, 2002 at 15:21:10:
Thanks for the response! I have thought of the idea of trying to get the people involved to take the payments over time but both are looking for the “quick cash” like most of us. Rentals in the area, according to friend, are about $750 a month, so yes it would have a cash flow of about $250 a month. I have talked to my friend about the property mangagement aspect of it as well. I guess the biggest thing that scares me is the distance factor and the amount of upfront outlay. I really dont relish the idea of “playing” land lord.