We apologize, but the forums are closed for new posts. Click Here To Join The Unemployables Facebook Group

Welcome, Guest. Please login or register.
December 06, 2021, 11:45:26 am
Home Help Search Calendar Login Register

Welcome, Guest. Please login or register.
December 06, 2021, 11:45:26 am
Home Help Search Calendar Login Register

Author Topic: My first Deal/Potential  (Read 15082 times)

Offline lando

  • Member
  • *
  • Posts: 14
My first Deal/Potential
« on: May 08, 2006, 02:34:16 pm »
This is my frist real deal/potential. It is a FSBO.

ARP= 60-66k
Tax Accessed Value= 35.5k
Repairs= 2k
My offer= 40k
Rent= 500$-600$
Comparables= approx. 60k

My offer has been accepted and I am going to be getting it under contract. Now I am still wondering if this is a good deal or not. The numbers seemed to work. Person selling just wanted to get rid of it. I also wanted to know if there is still closing cost if it is a FSBO? I am looking to wholesale it, or possibly owner finance and l/o the property. any advice is appreciated, thank you.

Offline kdhastedt

  • Member
  • *****
  • Posts: 5807
Re:My first Deal/Potential
« Reply #1 on: May 08, 2006, 02:40:01 pm »

I would say that, if your numbers are correct, you'll have room in the property to wholesale it out or to fix it and flip it for a decent profit.  If it only needs $2K in repairs, you should be able to knock those out quickly and flip it in a month or so for an easy $15K+.  It also has "buy and hold" potential...if you're into that sort of thing.

Keith
I have CDO...it's like OCD but in alphabetical order - the way it should be!

Offline lando

  • Member
  • *
  • Posts: 14
Re:My first Deal/Potential
« Reply #2 on: May 08, 2006, 07:21:13 pm »

I would say that, if your numbers are correct, you'll have room in the property to wholesale it out or to fix it and flip it for a decent profit.  If it only needs $2K in repairs, you should be able to knock those out quickly and flip it in a month or so for an easy $15K+.  It also has "buy and hold" potential...if you're into that sort of thing.

Keith

Yes, I agree with the whole fixing and flipping. I am having a problem with financing though. I do not have money and I'm 19 and am not sure if the bank would give me a loan for such a project, due to the fact i'm young and do not have a stable job due to me being college. I am just wondering if there are other ways of financing? I would really like to do the fix and flip. Is there some kind of deal i can make with the seller to still make that sort of profit? Thank you again

Oh and is there still closing cost with FSBO's?
« Last Edit: May 08, 2006, 07:30:03 pm by lando »

Offline imbeautiful1

  • Member
  • **
  • Posts: 96
Re:My first Deal/Potential
« Reply #3 on: May 08, 2006, 08:01:36 pm »
Hey Lando, I am also 19. You have learned the first thing about investing which is to use OPM (Other People's Money). Now you must learn that you NEVER and I mean EVER put your credit under scrutiny and at risk if you don't have to. You need to find an angel investor or google hard money loans to find a lender. They rarely check credit and if they do it doesn't really matter. They base their investment on the property. But you also have to think this through. You have never completed any type of deal before, and you have to understand, that a fix and flip is not as simple as it seems. You get in their with your contractors stay on them and make sure they do there job QUICKLY. Then you have to sell, or rent out, or do a lease with an option or something. But the question that no one could possibly have the answer to is how long it will remain unsold, or unrented. And you have do decide if you want a lump sum or cash flow. Anyway, back to your last question, basically if you can make the deal you can get the money. But you have to stop thinking with a proud potential homeowners mind, and start thinking with an investors mind.
« Last Edit: May 08, 2006, 08:02:17 pm by imbeautiful1 »

Offline rayray91

  • Member
  • *
  • Posts: 3
Re:My first Deal/Potential
« Reply #4 on: May 08, 2006, 11:08:27 pm »
Sent you an email

Offline mustbethe$

  • Member
  • *
  • Posts: 33
Re:My first Deal/Potential
« Reply #5 on: May 10, 2006, 02:17:43 pm »
yes there would be closing costs involved in this transaction. If your looking at conventional financing, I usually estimate the closing cost at between 3-5% of purchase amount.

Offline lando

  • Member
  • *
  • Posts: 14
Re:My first Deal/Potential
« Reply #6 on: May 10, 2006, 04:58:05 pm »
Ok sounds good.

Now I have made the decision to fix and flip the house. All I need is financing. Now if I use a HML, and me being a new investor, my age, and job promiscuity due to me being in college, what worries should I have about going to an HML, or what should I expect with this deal?
« Last Edit: May 10, 2006, 11:02:50 pm by lando »

Offline imbeautiful1

  • Member
  • **
  • Posts: 96
Re:My first Deal/Potential
« Reply #7 on: May 11, 2006, 03:25:00 pm »
The whole purpose of dealing with an HML is to NOT have to worry about these things. If you find a so called HML that asks for these thinsg skip along to another. A HML should only want your basic info, and the property info. They shouldn't ask about employment, and shouldn't care about your age as long as you are legal.

Offline lando

  • Member
  • *
  • Posts: 14
Re:My first Deal/Potential
« Reply #8 on: May 11, 2006, 04:17:30 pm »
Thank you, It feels like i have been beating my brains against a brick while trying to figure out why these HML people i continue to call are asking such questions. I knew such questions should not matter if it is a HML. As long as I can pay their point fee, their money back on sale, and interest if payments need to be made, then the loan should be there. If my view is wrong, then please correct me.

Offline imbeautiful1

  • Member
  • **
  • Posts: 96
Re:My first Deal/Potential
« Reply #9 on: May 11, 2006, 06:52:33 pm »
Thank you, It feels like i have been beating my brains against a brick while trying to figure out why these HML people i continue to call are asking such questions. I knew such questions should not matter if it is a HML. As long as I can pay their point fee, their money back on sale, and interest if payments need to be made, then the loan should be there. If my view is wrong, then please correct me.

You are correct. Now all you have to do is decide if you can use a HML that requires a draw account, for payment after repairs, or on that will let you overborrow, and get cash at closing. The latter is haard to find when looking an trad. HML's, angel investors (lower scale), are better for this.

Offline joel-investor

  • Member
  • *
  • Posts: 40
Re:My first Deal/Potential
« Reply #10 on: May 11, 2006, 11:38:06 pm »
Not to be a naysayer, but do you have the cash (or cashflow) to make payments on the loan?  If not, I would vote to take the quick 2k profit.  

Offline lando

  • Member
  • *
  • Posts: 14
Re:My first Deal/Potential
« Reply #11 on: May 12, 2006, 02:10:15 am »
I do have a cash flow, but if i did not, why woul dyou say back out?...to many doors have been opened and I think until one closes I believe I will continue to pursue the rehab. PERSISTANCE is what is needed here I think. Not saying that you are wrong in anyways, and maybe I should just give it up and wholesale it, but not yet. (NO DISRESPECT INTENDED)
« Last Edit: May 12, 2006, 07:05:35 am by lando »

Offline joel-investor

  • Member
  • *
  • Posts: 40
Re:My first Deal/Potential
« Reply #12 on: May 15, 2006, 05:38:46 pm »
None taken, I'm in a similar position, but I'm scared stiff about making the interest payments for a HML.  What I need to do is to get a business line of credit, I think.  Even with a "no-cash" deal, there still is a cash requirement.

Offline lando

  • Member
  • *
  • Posts: 14
Re:My first Deal/Potential
« Reply #13 on: May 15, 2006, 07:41:44 pm »
I said heck no to the HML and yes to the sub2...and so did the seller...beautiful thing

Offline imbeautiful1

  • Member
  • **
  • Posts: 96
Re:My first Deal/Potential
« Reply #14 on: May 17, 2006, 11:05:11 pm »
For those scared, of getting a HML b/c of the interest payments, I would suggest, finding a private lender and negotiating something like an overborrow, on a 3 year 11% interest no payment balloon. You could do it for a year, but the three years give you a little more freedom if you want to hold and maybe refi, and by overborrowing you get some cash out at close.

 




SMF 2.0.15 | SMF © 2017, Simple Machines