Hello everyone,
I am working on hopefully my 1st deal. I found a couple getting married and need to get out of a double payment situation. They seem very motivated because trying to sell for about 1 year. House was purchased for 109k and they are asking 107k which is what they owe. Comps are in this range also.They need min. payment of 950 month to cover PITI. Rental Rates running $800-$1000. I would like the L/O for 5 to 6 years and wait for backend money while slowly increasing rent. Owners are not very open to L/O. Should I keep pushing L/O or try Sub2? I am inclined to walk away if I can’t L/O. Any help would be welcome. Thanks.
Howdy Terrysimpsonjr:
Is this the best deal you can find? There is no equity at all and negative cash flow to start and the 5 year plan to get rich slow sucks. The sellers do not seem very motivated either since they do not like the l/O method they will probably not like sub/2 either. I like the idea of little down etc to buy real estate but I tried and failed at the 5 year no equity plan. After 10 years those same properties finally have equity but I lost 25 houses after holding them for 5 years with little or no appreciation and no increase in rents. Perhaps right idea but just bad timing. Any way I am a whole lot more careful now but still am aggressive with deals that have equity.
You may want to work on the same type property where they only owe about 80% of the value where they can still get a little cash for their equity and you get a better deal with at least a break even cash flow.
I have a duplex under contract for example that rents for $550 and the contract price is only $28,000 and needs less that $2500 in exterior repairs. With better credit I could do 100 of these this year.