Sorry if this sounds similar to another thread already on here, but I have a specific inquiry.
I am in a similar situation as another new investor on the boards, as I have quite a large inheritance sitting in a vanguard account right now, and am very interested in REI opportunities.
My uncle’s business was lending to builders and had as many as a few hundred projects going on. When the market went down, the contractors had to pay back my uncle’s lending business by any means necessary. This meant selling the houses they had just built for $110,000 (ex.) for whatever they could get. My uncle also had to foreclose on a few of these loans. He now has about 30 properties ranging from Durham-Fayetteville (fort bragg military base), North Carolina, re-appraised recently at roughly $90,000. They are made of mostly of 3 bedroom, 1-2 bathroom 1200-1500 sq. ft. houses, in not the best neighborhoods, all less than 5 years old. They average rent per house is $725-$800 monthly.
My uncle is trying to get the debt off of his hands, and will likely let go of many of these houses for $60,000 or so. This is 66% of the Appraisal price, which is already in the dumps because they were appraised after the economy turned.
Assuming that I have One hundred thousand or so in the bank, what is the best strategy to invest (or even make a living off of) these houses. Or maybe these houses are not the way to go. It is just an available opportunity that i want to make the most of. Also on a side note, 10-15 of these are in Fayetteville, NC. For those not familiar, this means that they most likely have military families living in them. Anyone have any experience with military families? Steady stream of income at least.
Side note: All of the houses currently have tenants renting them out. Thank you guys for any suggestions.
I also just realized the title makes no sense with the context of my first post, as I did not mention a strategy at all. I had one, but would like to hear other peoples first. THanks.
would your uncle sell them to you and hold the note?
Not very financially literate, but do you mean, would my uncle allow me to buy them from him over a period of time. Sort of like the mortgage is to him? If so, then probably not because he is trying to rid himself of all debt from the bank that he has incurred through all of this.
I really appreciate you taking the time to share this with us NCSU2010. Thank you.
It is a very interesting exercise and I imagine that many folks will have a variety of opinions to share with you.
Here’s how I personally look at it.
It helps if you have been looking at other real estate opportunities in your market because I would want to compare it to other opportunities that I have right now in the marketplace. If you can purchase other properties in other ways that are at either a better purchase price or with better terms then I’d look at those and pass on the properties with your Uncle.
If you have a real estate license or, with the help of your attorney, can structure an agreement with your Uncle that would allow you to get some experience selling the properties he has… I believe that is a worthwhile exercise that will give you some great experiences, build your contact base of other local investors and that might also add some money to your pocket (depending on how you structure it with your Uncle).
There is another investor on this board that was asking about how to build a buyers list and his challenge was that he did not have properties that he could use to build a strong buyers list. You have properties that with the cooperation of your Uncle you could use to jump start your wholesaling business. With a little capital in your account from your inheritance you could prudently make sure you’re operating debt free and use it to start a wildly successful wholesaling enterprise. While you can wholesale with very, very little money having at least some money to wholesale opens up the number and types of deals you can do.
I hope that sharing my thoughts helped. If I can do anything more to be helpful, please let me know.