Yesterday an REO was listed for $10,900. I thought for sure it must be a mistake so I called the broker and nope, that’s the price the bank gave him to list it. So naturally I ran over to his office and got the keys (just listed so no lockbox/sign yet) and checked it out.
It’s on a huge lot and is 2bed/1bath, 1150 sq ft, in the middle of town, close to everything. It needs a new roof, some ceiling repair, carpet and paint, but otherwise is a pretty dang charming house. It sold for $39k and is assessed at $44k. The lot alone is worth $20k.
I don’t think it would take more than $20k to make it perfectly decent (10k roof/ceiling,10k paint/carpet/appliances). So I would have 30k in it and I think I could resell it owner financed for $65k or flip it for $45k.
I want it so bad! I only have $7000 cash, so not enough and then it leaves me with no savings. Even if I could scrounge up the cash, the only way I could make a little money off it would be to find a buyer to buy it off of me as is and assign the contract to him or do a double close. I don’t have the money for repairs.
I’m so close to my first deal I can taste it! I need a pickmeup because I thought this was a great deal but I just can’t swing it yet. It bums me out to see a little moneymaker just go right past me. How did you guys get your first deal? What was it and how did you finance it? Getting started is the hardest part so tell me how did you all get started?
Thanks! There is already a bidding war going on with the bank asking for highest and best offer. Partnering with someone is a good idea, I can be a birddog of sorts and still maybe get a piece of the deal. On to the next one!
I started out on a credit card. I didn’t have cash stashed, but I got one of those offers “write this check for anything and pay 3.5% interest for the life of the balance.” Or it was something like 3.5%…pretty low anyway. So I wrote the check to me and put the money in my checking account. That gave me what I needed to get started.
Thanks for the reply! My credit union sends me those all the time. I could have figured out a way to get the cash and could have taken out a rehab loan for the repairs, but what worries me is not knowing what problems lie underneath. Maybe all the electric was bad, or there are liens on the property. I didn’t have enough time to do any due diligence and on deals like this you have very little time to act, because others are acting fast too. I don’t want my first deal to make me uneasy or be a complete disaster. I don’t have much of a cushion should something go terribly wrong. I know you need to act fast on these but I only want to move on something I feel confident about! Perhaps something with a roof and ceiling, given my experience. Does anyone have any stories on things that went right (or wrong!) on their first deal and any other ideas on getting cash?
Yep. I’ve done that twice now. After I got the initial down payment money paid back off, my wife and I found another house we wanted and bought it with the credit card too.
this is exactly what i would do if i were in your shoes… if i had 7k id take 500-1000 and use it as down payment money for that house with a offer of 6500 if the bank accepted id immmediately do a cash sales search of the last 90 days of that area call the owners of those houses and let them know about the deal i have… then id add one of the buyers to my deal with the add a buyer for financing type addendum then once the deal was closed i’d deed myself off the property for my wholesale fee :beer or id get a LLC first then get the home under contract with my LLC name and sell my LLC to the interested buyer for my fee…
Yeah, how? I have access to the MLS but even when I search cash sales, all I can find out is the selling agent, reason for purchase and that it was cash. Can you search through the county or city somehow?
I just got my limit raised to 7k and my interest rate is 10.9%. It’s through USAA and I know 7k may not seem like a lot to some people but I’m young and don’t make a lot of money, so I’m happy with that for now. I don’t have any credit card debt and in total I have about 10k in credit. The more I am on this board the more options open up to me, so as long as I keep looking for deals like this, someday I should be able to put one together!
bosslady,
For your first money-making deal, you don’t need to be in a bidding war with other buyers and agents. Plus with you working full-time, how will you oversee the renovation?
If the house is not occupied, you have no idea if the plumbing has to be totally replaced, if the sewage is draining into a cesspool, or the kitchen sink is draining under the house, and has been for years. I encountered those last two items on my current renovation.
When you are selling real estate you are out there talking to people all the time.
Look up Jake’s old posts…try to find a “Don’t want 'er!” house from an overwhelmed heir. That could be your niche, not contractor-level fixers.
Ok what you do is after you have all the addresses of the cash sales of the last 90 days go to the county website and find out who owns the houses and then do a reverse look up on them and call them up if you cant find a number then just send out a letter…
I am a local real estate agent and I’ve become a pro at CMAs. Got my real estate license just to get access to the market and learn more about real estate. And make some money to invest with!
and I’ve become a pro at CMAs. Got my real estate license just to get access to the market and learn more about real estate. And make some money to invest with!