id like to ask you all

i know some of you have been doing rei for a while
i’d like to know if any of you would like to share your first experience in acquiring real estate for investment. if possible with an emphasis on start up costs for closing, down payment etc.

my first deal:
on my 23rd birthday i stumbled upon a house in pre forclosure. i left them a letter on their door, they called back a day later asking me to come over, i did all the due diligence and negotiating with the bank and subordinate lien holders and in total i needed to 9k for closing costs and reserves the bank required

so what is your question?

Nevermind other people’s deals. (I don’t have any…yet)

But what is your exit strategy? (learned that term on here) :wink:
or what is the purpose for this purchase?

Rehab and sell?


Primary Residence [w/ accessory apt]?

Your exit strategy will guide you through any deal.

Once you establish that (if you haven’t already), then you can figure out your estimated Return On Investment - ROI.

If you plan to sell it - and the 9k initial investment will only return 3%, then that may not be all that advantageous.

It’s all about the ROI based on your exit strategy.

Of course, that’s only a very small piece of it all - then there’s all the questions of asset protection, and holding costs…if any.

I guess you look at:
Net Operating Income

and compare it to the

Return On Investment

measure these to the potential risks…which of course, you want to keep to a minimum…or at least I do.

Good Luck.

thx for your response but i wasnt asking a question i just wanted to see if anyone wanted to reminisce on their first deal ;D

My first realestate transaction was two homes 2geather on a land contract. It worked out pretty well and I kept them for 13 years. It helped me establish myself and gave me confidence to continue.
Is your investment going to be successful?

funny thing is mike im looking into a similar deal as yours. its a double lot and one of the lots has a duplex on it but the seller refuses to sell the empty lot and duplex separatley. its a sweet deal…right now im just debating what to do with the empty lot…building costs in florida are brutal these days

how does a land contract work?

i’ve read about it, but i really just don’t get it -

installment payments - okay…how often? how much? how long?

you make x amount of payments - when do you get the deed and ownership of property?

TMCG - Land contract is based on seller financing, The only difference is that in land contract is that the seller keeping the title & deed until you repay the debt. There is one catch to it. If it takes you to repay in 5, 10 years, where do you find the seller to get your title to the land? He might’ve disclocated or moved out of a country.

Reminisce? It was in the back seat of my '60 Chevy

Da Wiz

Another difference in land contracts, as a seller you pay income tax effective the date of the sale. And, of course, they violate the DOSC.

In my case, with the l.c., there was no balance owed on the prop, hence no dosc. ( due on sale clause)
The two homes had been on the market awhile and needed some attention. They had a good case of “deferred maintainance”. I was fresh out of high school, had excellent but limited credit history, and was looking for my first deal. It worked out great for me. The seller put the taxes and insurance in escrow and set up payments thru a local bank. I recieved a coupon book for payments. I moved into the smaller of the two homes and rented the larger one. In that scenario, I was almost living there for free. It really helped me to get on my feet. I was able to save substantial money while there and eventually bought another home, moved out and rented both with about $400/mo positve cash flow.
Looking back, I should have stayed there longer and saved even more money. I was living cheap. It was a situation that I only had available to me at that time in my life. Now I’m married, 43 years old, two kids, and have lots more obligations in life, like everyone else.
Jen - Seize the advantages that are available for you now and use them to their utmost advantage. They will pay big dividends in the future!

While we are on the subject, this is an email I received yesterday: “I had a friend who sold a house on a land contract… and the guy stopped paying and my friend tried to evict him… and he claimed “equitable interest” and it took 2 years to get him out… so he lived for free for 2 years at my pal’s expense…I am in Louisville, Kentucky.”

Da Wiz

We put in an offer on a foreclosure that we had watched be vacant for 18 months. It was obviously run down and with foundation problems, but it was a cute house with potential. Freddie agreed to repair the foundation prior to close, we gutted it and replaced everything but the water heater. $20k profit.

so, regarding land contracts - what is this that i hear, guys pay on the land contract for like 6 months, get the property appraised by a bank, refinance and then own the property?

how does that work?