:help I am newbie to Real Estate investing and need help. I found a guy who has a number (about 5) of investment properties, store fronts with apartments above. This kinda fell in my lap and don’t know what to do. I have been looking at starting with SFH’s but I didn’t want to walk away from this. He is willing to do 80% owner financing. I feel like a hungry monkey staring at a fruit basket behind a wall of glass.
I live in Pa,
I have no money,
I have the desire and drive in spades.
What skills do you have? I get you have no money, are motivated, etc. Maybe you have trade skills where you can use your knowledge & experience to add value.
What does the property need if anything? Are the units rented?
What does the investor want or need? What is the seller’s motivation? Does what the seller tell you stack up when you consider the facts?
A shop with rental above is very likely going to be harder to finance conventionally. The seller’s desire to offer financing could easily be based on the seller knowing the lenders are not interested. If that is true, you will have the same problem when you go to sell or refinance.
The fruit might be all rotten so the bowl of it might make you sick. At the same time you can learn from any property deal where you negotiate with the seller.
I would not be motivated to do a commercial deal with 80% owner financing…most anybody with property for sale will do that or finance up to 100% in our current economy. Unless the property is generating great income with long term proof of that income, I would pass and keep to my plan of SFH’s. Then if you stubb your toes, it will be manageable and you can grow into the business.
Personally, I started with mobile home deals…which I’ve been doing for since 1991. You can buy one for $2k, sell it for $500/down and $200/month for 5 years. Now you have a security (mobile home finance paper secured by the title) which you can keep or sell. I sell mine at 18% yields to people with Self Directed IRA’s.
60 payments of $200/month at 18% would sell for $7876.05. Add the $500 down and you just made a profit of $5,376.05. Now repeat often! You need to know some important items regarding where the mobile home is sitting and if it can remain, but that stuff is easy to learn. Eventually, you can pay cash for anything you want including SFH’s.
Hope this helps.
Rob