Why borrow money to purchase the houses when you have the cash? Pay 8% interest while you collect 4% on your savings? If one is starting small, why not buy for cash and leverage the money when you are ready to expand? Besides, it is hard to get a loan for the chap houses I am proposing, if you go that route...
If there are good reasons, I am interested, as this is a position I will (hopefully) be in soon...
Thank for sharing the story, it was a good read for me. I lived in Dallas for a year, so i can relate to your story. Texas is hard to cash flow, because of the high insurance and property taxes, so you are doing well...comparatively.
This site has been very useful to me also. I guess as long as you are in the rental business, and want to stay on top of things (even if you have a property manager) its a must read site.
mdavey
Find out what they have to have now, and put it on a lease option with say $10k down and negotiate low rent with an assignable option to purchase. The $10k you put down applied toward the balance of purchase price of 70% of FMV minus repair costs.
I had thought of that but this is going to be a quick sale and the realtor is ready to take it to market. I offered 200k and they took it, I can sell it for around 260k. I was thinking of just leaving it in her name until it sells and just making a contract between me and her that they would get their full 200k minus any money I give them now and the rest would go to me. So can I use an equity purchase agreement? Thanks for the help.
What real estate agent is ready to take it to the market?
How long are you planning on holding the property while making improvements and selling property?
Are you planning on putting a lot of money into improvements while you hold what?
If you list with an agent and pay points and closing cost, it could wind up costing you 10% or $26k then you have the holding costs and the costs of your improvements.
You also have the lost revenue of your $100k.
The biggest thing is your risking your $100k.
If you do not close on the deal you will loss your $100k plus your improvements.
Be careful
cycledog
[ Edited by cycledog on Date 06/24/2007 ]
The kind of contract is Articles of Agreement for Deed or Land Contract. Do not attempt to document this transaction yourself. Get thee to an attorney or title company.
Is there anyway you can convert the use to an assisted living residence? The only ways out of this I see is
1) change the use to increase the possible income
2) do a lease option to cover your loan pmt.
3) try to get the bank to agree to a short sale
4) throw in the towel & give it back to the bank
[ Edited by fattylip3 on Date 07/12/2007 ]
Great advice Pierrie! thank you very much!
[ Edited by fattylip3 on Date 07/12/2007 ]
[ Edited by fattylip3 on Date 07/12/2007 ]
[ Edited by fattylip3 on Date 07/12/2007 ]
[ Edited by fattylip3 on Date 07/12/2007 ]
finniganps,
Why borrow money to purchase the houses when you have the cash? Pay 8% interest while you collect 4% on your savings? If one is starting small, why not buy for cash and leverage the money when you are ready to expand? Besides, it is hard to get a loan for the chap houses I am proposing, if you go that route...
If there are good reasons, I am interested, as this is a position I will (hopefully) be in soon...
Chris
Thanks Joel, appreciate you looking out for my interests!
Anyone have thoughts on buying pre-construction in the right areas with equity built in on day 1?
OH and my dad is dead.
[ Edited by fattylip3 on Date 06/11/2007 ][ Edited by fattylip3 on Date 06/11/2007 ]
[ Edited by fattylip3 on Date 07/12/2007 ]
[ Edited by fattylip3 on Date 06/12/2007 ]
[ Edited by fattylip3 on Date 06/12/2007 ]
[ Edited by fattylip3 on Date 06/12/2007 ]
[ Edited by fattylip3 on Date 06/12/2007 ][ Edited by fattylip3 on Date 06/12/2007 ]
haha
Good post ddipaola,
Thank for sharing the story, it was a good read for me. I lived in Dallas for a year, so i can relate to your story. Texas is hard to cash flow, because of the high insurance and property taxes, so you are doing well...comparatively.
This site has been very useful to me also. I guess as long as you are in the rental business, and want to stay on top of things (even if you have a property manager) its a must read site.
Good luck
Agreed...very good post Dippoalo...thank you for taking the time to tell your story...very helpful
Agreed...very good post Dippoalo...thank you for taking the time to tell your story...very helpful
[ Edited by fattylip3 on Date 07/12/2007 ]
[ Edited by fattylip3 on Date 07/12/2007 ]
[ Edited by fattylip3 on Date 07/12/2007 ]
mdavey
Find out what they have to have now, and put it on a lease option with say $10k down and negotiate low rent with an assignable option to purchase. The $10k you put down applied toward the balance of purchase price of 70% of FMV minus repair costs.
I had thought of that but this is going to be a quick sale and the realtor is ready to take it to market. I offered 200k and they took it, I can sell it for around 260k. I was thinking of just leaving it in her name until it sells and just making a contract between me and her that they would get their full 200k minus any money I give them now and the rest would go to me. So can I use an equity purchase agreement? Thanks for the help.
Mike
mdavey,
What real estate agent is ready to take it to the market?
How long are you planning on holding the property while making improvements and selling property?
Are you planning on putting a lot of money into improvements while you hold what?
If you list with an agent and pay points and closing cost, it could wind up costing you 10% or $26k then you have the holding costs and the costs of your improvements.
You also have the lost revenue of your $100k.
The biggest thing is your risking your $100k.
If you do not close on the deal you will loss your $100k plus your improvements.
Be careful
cycledog
[ Edited by cycledog on Date 06/24/2007 ]
Mike:
The kind of contract is Articles of Agreement for Deed or Land Contract. Do not attempt to document this transaction yourself. Get thee to an attorney or title company.
Is there anyway you can convert the use to an assisted living residence? The only ways out of this I see is
1) change the use to increase the possible income
2) do a lease option to cover your loan pmt.
3) try to get the bank to agree to a short sale
4) throw in the towel & give it back to the bank