Closing In On 1st Deal, But May Have Hit A Snag
Hello everyone,
I am a newbie investor in New York just getting started with lease-purchase options. I've been doing research for over a month now and a few weeks ago decided to order an inexpensive course on lease options by TC and Vickie Bradley. It was simple and clear enough to follow and so here I am.
I've already set up my website and my business line. I've even got a toll free number. Last week I ordered some classified ads on some Florida weekly newspapers. In case you are wondering why Florida—my brother is a mortgage broker in Miami and I thought it would be helpful to team up with him and expand my market opportunities. Besides, I am intimidated by the New York market and the outrageous cost of real estate here...so I chose to start out in Florida.
At any rate, I found a property on a FSBO website and have been communicating with the owner. But now it turns out I'm dealing with a fellow investor as well. He is willing to grant some flexibility so we can both profit, however.
Here's the skinny:
House is up for $169,900. He wants 5% down and $1200/month which just barely covers his PITI. Basically, his down payment requirements pretty much kill my chance at making an upfront profit unless I market to a tenant/buyer for more than 5% down. I can possibly raise rent to $1350 to try and make some cash flow and simply resign my upfront opportunity. I would then try to make my profit at the backend of the deal.
This being my first deal, I don't want to get too over-anxious and jump into something that may not be worth it. I've already ordered Scott Rister's course on finding motivated sellers to help me find my target market better—but I feel that making my first deal will be a tremendous boost of confidence and will help me get over than first hump.
Any suggestions or comments would be greatly appreciated.
thanks,
Camilo
Hi Camilo,
The one thing I have read by many good authors and mentors is that you cannot loose with an opportunity that you pass up. You can only loose if you go for it, and it turns out to not be a good deal. I suggest that if you feel this is too tight for a profit, then let it go and keep looking for a better opportunity. If you get involved with it and you end up struggling, you will miss the next good opportunity when it comes. Allow yourself to be free so that you can jump on that next (and better) opportunity. You mentioned that if you get over the hump that your first deal will be a "tremendous boost of confidence" for you. Well, look at it this way---if you have the strength to not get emotionally involved and recognize when a deal is NOT good enough, you can just walk away and be ready to jump on a better deal when it comes. Then you REALLY will feel a tremendous boost of confidence at that time. This logic I have learned from trading stocks, the hardest thing is to admit when a deal is not good enough and stay away from it. Hope this helps.
I wish you many profitable investments.
Glenn
camilomachado,
Glad to meet you.
There is no deal, except for the investor.
Now, when a new investor like yourself calls me and you are easy to spot, I just pat them on the back and tell them to go on down the road, with a little advice about buying from investors.
My reason for saying this in certain types of investing deals you leave room for the next person, but most investors have the deal strung tighter than a mosquito's butt over a 50 gallon barrel.
My analogy would be this person is looking for lunch and you are it. Don't make your first deal your last deal.
John $Cash$ Locke
I would not do that deal unless you could get it for 0 down and no personal liability. Then you would have only a small black mark against your reputation if the deal went south and would not lose much money, only what money you may have to pay in case it does not rent or l/p for a few months. Study the market in Miami to be sure if it is a buyers market or sellers martket etc. Find a more motovated seller at a discounted price. Anyone can pay retail and per 5% down on just about and house in the MLS. Make your money when you buy and not after trying to hold on for years and hoping for some small amount of appreciation.
Good LUCK and Thank You
Hope this helps some
Ted Jr
What's the market value of the house? And what makes you thing you would be able to get more rent if this investor isn't able to himself?? Does the rental market support that? If not, it's just wishful thinking.
I agree with the other post's- STAY AWAY! It sounds like you have doubts yourself, too. I would look for something with better numbers.
Thank you all for your input. It just confirms that I should listen to my gut feeling and have trust in my instincts.
As I said, I was hoping this would be the first of many. But then again, I've only been actively chasing leads for a little under 3 weeks.
I am sure the time will come for me. Persistence is something I will continue to harvest until it's second nature.
Thanks again everyone...I will take a pass on this one.
Camilo,As far as this deal goes pass on it. From the sound of this deal there is no deal. The profit is slim if not non-existant. It may take 3-6 months to find your first true deal. Do not give up.