need to get out or fix bad deal HELP

[urban_investor]

@bdub post:19

Hmmmm…

Urban, where are you located? is this a single family or multi-family?

You’re not really hurting yet, but if you have a major repair or a vacancy come up… Currently, you’re not making money, but you aren’t dying, either. You do have a few more options other than a fire sale. They may not be optimal, but they could help stem the tide:

1. Buy a home warranty. This could protect you from a major bill (like an a/c, plumbing, roof leak not due to age).
2. Buy down the rate to get a lower note (more monthly spread) if you can.

of course, both of these are “throw more money at it” solutions, and not “do it right up front” solutions. some people make money by putting money into projects. it probably matters where you are, though.

as propertymanager states, more houses are coming on the market which could push prices down. in certain areas, like ohio, where mike is, i bet this is the case for home sales and rentals… or you could be where i am - houston - where more houses are coming on the market, but more people are coming, too. everyone needs a place to live, and they can’t all buy homes. there are a bunch of empty foreclosures AND rents are up.

if the place doesn’t have a lot of deferred maintenance, you may be able to get by. i have a place with worse cashflow numbers, but i raised rents this month at renewal time, and when the 6 month lease ends in may, the rent will go up again (considerably if the current renter moves out). i’m not trying to sell it today (but it’s always available to be sold, of course!)

listen to propertymanager and listen bluemoon06 - know your area and what works in your area. the 50% rule is a great guideline for buying the revenue producing assets that people will call their homes, but clearing $325 a month over PITI is not dire if you can manage the downside risk.

Doesn’t sound too bad
2 family
Springfield ,Mass
It’s not quite war zone but not too far removed overall I’d say C C-
western part of the state kinda ot of the way compared to Boston
Both ideas don’t sound to bad except for Money going out
I 'll explore buying down teh rate and thE ramifications
guess I’d speak with my Bank?

Not dire just yet but made this purchase over a year ago adn wasn’t familiar with half the things I know now like 50% rule and bunch of other stuff

Thanks

[urban_investor]

@tatertot post:20

If it is just barely breaking even, you can hang on until spring.

Winter is the very worst time to try to sell real estate, and if you list now, the listing will be stale before the buyers come out of hybernation.

Unless the property is in a war zone, it shouldn’t be too hard to sell a building that is breaking even. Not every investor has talked to Mike.

While you are waiting for spring, you can be dolling the place up.

Yes I am hopeful

Thanks

[urban_investor]

@Aikin post:18

I have no advice I am new but have questions.

You stated that it’s not bleeding, so what makes it a “bad” deal?

How much is your tax/insurance/water/trash/etc per month?

What is your ROI (i.e. how much did you put down)?

What method (I don’t know what it is called, but the “numerical workings of THIS IS A GOOD PROP”) did you used?

I tried to buy a house, was told it had to be rehabbed and with an estimate of the new loan amount. I would had been profitting about $3 per month. It would had been my first house, but I still have to buy eventually. (just not THAT place, even though I liked it)

Sorry I can’t help.

what makes it a not so good deal is 50% of the rent is to cover the above expenses you mentioned and the other 50% should be PITI and some profit

the problem is I didn’t use a formula , invested without a plan and education :banghead

[EBS11]

Hi urban investor,

I am new here and was just reading your situation. The first question is; Is the place rented or vacant ? One solution would be to put an ad in the paper that goes like this:

Desperate Seller, Rent To Own
with Buyers Assistance Program
3br 1 ba. Call Phone Number

You can put a sign in front of your property with this ad, you can put out fliers and don’t forget word of mouth ( Tell The World ).

Then when you get the flood of calls from tenant buyers first question is: How much money do you have to exercise your option to buy ? You want minimum 5% or $5000 Down Payment. Then when you have all of the buyer tenants lined up and make an appointment with them to meet you at the property the same day with their CHECKBOOK IN HAND. MAKE SURE THAT ONLY ONE SET OF TENANTS GO IN AT A TIME. YOU DON’T WANT TO CREATE WORLD WAR THREE WITH YOU IN THE MIDDLE AND BESIDES THIS WILL GET THE BUYERS MORE MOTIVATED.

Make sure you have credit applications on hand so they can fill out. After they fill out the credit application with their deposit you will let them know in 7 days who you will put in the place based on their credit. Even if they have marginal credit you can find a Broker that will work with them and get them financed in 3 to 4 months max. Of course you will need to return other uncashed down payments to buyers but the beauty of this is these people will become part of your buyers list and you can find more properties to put them in.

Where the Buyers Assistance Program comes in is you will have the Buyer contribute towards their Down Payment by getting an extra 300 dollars over your mortgage payment and crediting them back $200 toward their down payment every month. and you get an extra $100 dollars cash flow to you. In worst case scenario you will do a 1 year Lease with Option to Buy with your Tenant Buyer and you can get them qualified through most banks because you have one year track record on your Buyer to get them financed.

End Result: Your mortgage payments are made and you get rid of your bleeding.

There are 65 to 70% of the population that believe that they can’t buy a home but as you will see it is not so. Rent to Own could be your ticket.

The other option is to do Owner Financing where you get a buyer on a Rent to Own ad and they give you a Down Payment of atleast 5% or minimum $5000 and do seller financing but the maximum interest you should charge is 10% because of financing laws. If you decide to try this method you should check with your attorney on the maximum interest you can charge in your state.

If you have a good tenant in your place you can offer them first bids and make sure you always get a credit application. VERY IMPORTANT!

I hope this helps out and would like to see your end result.

:beer