Hi Everyone,
A little question: when we say 'don’t pay retail for the property" does that include the 2nd taken by the seller as well?
Thanks,
CC
CC…
Theoretically yes…sometimes, however, good owner financing can make up for paying a little extra.
Don’t get caught up with “not paying retail”…especially if you are struggling to get financing at all. I’m not terribly concerned about what is retail and what is not. I’m more concerned with how much is it? How much do I need to put into it? How much will it rent for? Is there a decent positive cash flow (at least $125 a month – absolute minimum)? I usually pay less than retail because that’s how the market is here. Some markets are more difficult…some makets are just, plain stupid!
Keith
Yeah most will not agree with that but I agree if it cash flows buy it! Paying full price is not a bad thing if you live in a great rental market!
You guys rock! I think I’m anal retentive. sighs
If it’s for “buy and hold”, soem things don’t really apply.
I am almost to full contract for a property for about $50K…the asking was $58K but I can put about $3K into it and rent for $650-700…so what do I care that the price is not exactly XX% below retail? Fixed up, the property will appraise for about $62-65K. The “30% below retail” folks will tell you that I shouldn’t pay more than $42,500 for it ($65K X 70% - $3K)…but when the smoke clears, I will have $12-15K of equity and a cashflow of about $200-250 a month.
Keith
Keith is right. You have to keep in mind what you are trying to do. if you are going to buy fix up and sell, you have to have buy it cheap enough to make your profit. If you are a buy and rent guy, then cashflow and out of pocket to start are king, not purchase price.