I put a property under contract the other day and I’m a little nervous about it. This is my 1st property after having made some bad deals that I ended up losing as a result.
I started a landscaping business and I have been getting flack for parking my trailers on the side of my house. I have always wanted to start a nursery and a better place to park my equipment & trailers so I am looking for a house with some land.
The house I live in now is a 2/1 1,100 sq ft (which has my 2 kids sharing a room and my office in the living room… don’t even get me started on sharing a bathroom with 4 people)… I am paying $1275 rent to a family member which is barely covering the mortgage. They bought at the peak of the market and the house right next door has been empty for 3 months… It is a 3/2 and they’re trying to rent for $1,000 and it includes lawn serivce & pest control.
I found a 3/1 1700 sq ft house on 5 acres! At the peak of the market it was a $300k property. Zillow has it currently at 209k and tax appraisers at $161k.
There is a 1st of 73,000 and a couple of liens and judgements that bring it up to about $100k owed. I offered to take over the 1st, assume the liens (which I would attempt to negotiate and pay off later) and the seller to hold back a $40k note.
The 1st mortgage payment is $718 and I said I could afford to pay $1,000 (which actually has me paying $275 less every month!). So I said every month I would write 2 checks. 1 to the mortgage company for $718 and a second check for $282 which would directly reduce the pricipal of the 40K note. Which is basically a zero interest loan. The seller agreed and gave me 5 year balloon.
So basically I offered $140K for a property that zillow has valued at 209k, I will be paying $275 less a month than I am now, will pick up an extra bathroom and 5 acres to park my truck, landscape trailer, dump trailer and start a landscape nursery.
Did I do ok?