Property asking $475k, owner wants down 30% $150k, seller carry $325k @5%. This sounds like a good deal to me, what do you think?
The realtor said the property need only minor repair and the tenants are long-term but from the pictures it looks like the place need alot of work.
I asked the realtor to represent me too and see if he can find me someone who can assist with the down payment. Is this a wise move to trust the realtor who’s representing the seller?
How can I protect myself if realtor represent both of us?
This is a great deal if the property is worth $800K to $900K or more…but, no where do you indicate the VALUE of the property - only what the owner is asking.
You won’t make any money in REI paying retail.
It is a TERRIBLE idea to let the seller’s agent represnt you and it’s a huge conflict of interest. The only thing that agent wants to do is sell the property as soon as he can for as much as he can.
You appear to be rushing into this blind. What’s your background? How are you currently qualified to do this?
If you are going into this business you need a team. This team needs to be mortgage broker or bank, realtor, appraiser, attorney, CPA, title company, inspector, contractors of different type.
You will probably need more than 1 and you should start gathering your team now. Use your realtor. The seller pays the commission for him anyway so there is no need to use the same one as the seller is using.
Hello, I sure appreciate all your comments. The value of the property according to zillow is about $476k.
I was going to finance the 30% down payment and ask the seller to carryback the balance.
But, all of a sudden the realtor emailed me that they are taking the property off the market until spring. Still, he wants me to write-up an offer to the seller. Confused.
You need to do more research for your next project. Realtor who represents buyer and seller is conflict of interest. You will need a buyer agent.
It is a great time to buy. Interest rate is low. Look at foreclosure or short sale at maybe 20% discount. Never pay retail. Real estate market is in cycle. Remember 1970’s market and the 1980’s too.
if 325K @ 5% = $1742 month
So what is the rent the tenant is paying. Gas , electric?, Property taxes?
Financial, is this a positive income, or negative income. List the pro and cons like a SWOT analysis. If owner call look at a wrap around mortgage to see if it is viable.
Tenants paying $2500 a month; monthly expenses including p&i, taxes insurance should be around $2400. The problem is the down payment is about $130k which I do not have and I need to finance.
Any suggestion on how to structure a down as a 2nd? Also I would like to get funds to remodel which will easily cost about $50k. Another issue is a six months reservce in case tenants do not pay?
How do I successfully finance this deal and have reserve?
You need to LET IT GO! You should also stop calling it a ‘deal’ because it’s not.
This is a huge loser any way you slice it…it is an alligator that will eat out of your pocket to the tune of about $1200-1500 a month PLUS whatever the cost of obtaining the $130K downpayment money will be. Additionally, PITI are NOT the only expenses that you would have - not even close.
In your original note, you mentioned ‘minor repairs’ and then now you say you need “easily $50K” - generally, $50K is not ‘minor repair’.
Thanks Keith, I have let go. I talked to the realtor about lowering the price and the owner was not interested. He’s taking the property out of the market until next spring.
I’m really curious what your thoughts are on my post regarding the lease-option property.
Keith, have you bought any investment properties in California? I’m just curious what is experience based on in terms of areas. Here in CA properties are high and it is very difficult to find an investment property with positive cash flow. In my opinion, if you can break even that is a great prospect.
I’d NEVER have anything to do with California…everything in the state is either broken or broke or both.
My opinions are based on the numbers you gave, regardless of the location. You won’t make money on a $475K house that yields $2,500 a month…that rascal isn’t even close to break-even.
You can do what you want and I’m sure you will, but the figures don’t lie. This is a loser.