Would you buy it?

Town population 8500, total housing units 3200 ,total units currently on market 170 ,average days on market 180.Heres the deal 3/1 +den, laundry room,large dining room,living room,kitchen ,central A/C heat ,not much of a short basement,large 20x15 covered deck on back of house covered front porch,2+acres 3 car garage 2 stall stable for horses on edge of city limits needs $10k conservativly rehab. last sold 3 years ago for $69,000 asking price $38,000 firm cash only, bank owned. small midwest town[/color]Comps should support ARV $70K+

Please delete this post. If that Blonde cowgirl of mine sees it, she’ll make me buy it and move there just to use the stalls, which will cost me another 10K in horseflesh…lol. Thank God you didn’t mention anything about good nearby fishing or I’d be a goner!
Lots of inventory for such a small town. Average DOM is probably way higher than 6 months, I’d suspect. Doesn’t appear to be any appreciation, either. In my experience, this is a niche market home. Do a killer rehab, find a horselover, you got it made for more than what you’re figuring. Be sure to factor in your holding costs since it may take awhile to locate the right buyer.
Since the bank already owns it and has been carrying it for 6 months (Causing them to have to reserve $230K that they can’t loan out); tell the bank exactly what it’s costing them in lost revenue holding it. They’d rather give it to you for 30K right? If they won’t budge, go after it again in 60 days so they can feel a little more discomfort.
There’s no such thing as a firm offer when a bank’s involved. Good luck on it!

P.S. The 32 acre lake is 2 miles away and the entrance to the 280 acre park with pool is 100 yards away?Ooooops was I not supposed to mention that :-\ I put an offer in @ $30K and they said we just lowered it from $42k final offer $38k .Ive missed a few deals trying to squabble over the better bargainer and I think this is one of those deals thats just worth the asking.Im a little concerned about the holding but I figure even for a year If I pay cash it would only be a couple thousand ,maybe $2k total to hold for that long.Yes the cash is tied up but for $15k - $20K it may be worth it .Unless I can find someone to finance it. Well even at that its going to cost a few thousand to hold. But I can use the capital to find another HMMMMMMMM.Never mind me Im just talking to myself here .Feel free to jump in at any time.If my company owns it .I will title it in the company name Will a lender finance it if it is vacant knowing Im going to flip it .I just want to use his money to hold it so I dont have to use mine.Any ideas?

You could use HM to borrow both acquisition and rehab costs. I’ll tell you, though they ain’t gonna be excited about a small deal like 48K, but you’re over the minimum of $40K that most all lenders are now doing. Usually 12-15% 1 year term 3-5 points. HML’s only lend at 65-70% of the ARV. At 70K you’re almost there. At 75K and only 10K rehab, you’re there. One statement that concerned me after re-reading your post is “10K rehab conservatively” In my experience, there’s nothing conservative about rehabs. If it can get more expensive than what you were planning, it will. I think that little runt MURPHY wrote that law. I’m sure you probably mis-stated it, but I use the costs/labor and then factor in another 20% to combat Murphy and the invariable overruns.

Im one of those people that irevocably falls in love with everything I do convincing myself Im doing the right thing. FO rexample I look at a project and say WOW , with a coat of paint new flooring and some appliances this thing will look a million bucks better ,and it will . But as I get into it and I see the vanity just doesnt match like I thought it would and the outside really should be repainted now that I look at it closer. ::slight_smile: I do it to myself every time.when I say $10k to me thats saying ok Im going to do cosmetics But I know Im going to end up with stainless appliances and the better flooring than I plan on now.They say your not supposed to fall in love with your business dealings but I cant help it they look so nice when they are done and this one Ive actually considered keeeping as a summer home it so right for that .But Im buying it to make money cause I need cash.(want cash)I am the guy that just goes against the grain but always seems to finish against the odds,So I have a few brushburns and splinters but the story really captures your attention ;DI started my adventures using hard money ,but I thought once I got to the point where I could take a heloc on a prop and use my own money that would get me better deals with less cost ,well it does but it ties up the money and I cant see spending $500/motnth to guido when Im going to be hammering my heart out anyhow in a musty dusty house. :hammerhead:So many choices so few :banghead:

I would not use hard money for this deal, unless you want $10,000 of your profit to be wiped out by the loan.

Also, I’d be very concerned about buying a rehab property that is in such a niche (mini horsefarm). With such a small population, if someone wanted that property, they’d probably already have bought it. You could wait a LONG time to sell it, during which time your profit is gone and your money/credit is tied up.

My understanding was that your goal was to get into RE full time and quit your job. If you’re going to primarily do rehabs as the vehicle to accomplish that goal, then this property is not a wise decision. If you’re going to be a serious rehabber, then you’ve got to be able to turn your inventory quickly. Is that important? Yes, that IS the rehab business - buy low, rehab fast, sell fast! A losing plan is buy at market, rehab slow, and hold a long time!!!

Again, you’re over anxious to buy ANYTHING and I don’t believe that this will help you reach your goal.


I see you havent lost a step keeping up with the posts as a true REIcluber offering more of your sunshine to those in need of skin cancer ;DIm not in a hurry to quit my day job although thats exactly what Im planning on.Yuo and I are from two different tranes of thought.It is not a mini horse farm it is exactly what YOU spent all that money on for someone else to tell you what to buy.It is very unique to the setting . Country charm in city living.with no zoning restrictions,Walk to work store your antique cars in the garage ride your horse , walk to the park and yet still pay city taxs ;DI dont buy property with tenants or that have been on the market less than a year,TYPICALLY.Your right turning inventory quickly is key but Im in no hurry to be a millionair.You from what I gather dont flip property you hold them as I di some too.Are you affraid to take the risk of not being able to sell?I know you are not banking on appreciation in Texas.My grandkids grandkids will be dead before you r homes appreciate more than enough for you to retire.If you look at my web site and go to unfurnished prop and click on 931 sw 2 ct. This particular piece of property was my 3rd project .At a time when here, their were more wholesalers and rehabbers working the neighborhoods than actual realatores.This place was on fire with investors.This particular house sat empty for 1 1/2 years.We asked other investors about it and they said it was bank ownd had structural problems the rooms had sunk in places and there were over $45k in city leans on it escalating at $200/ day and it was condemed.The REI sharks didnt even comment when I asked If they thought it was ever going to go on the market.They stated something about it needs torn down but since it is in the historical area they wont touch it and neither will anyone else.I just happend to drive by it every day for about 9 months on my way to the farm(the neighborhood I was scoping out) and low and behold the bank put it on the market for $165k The wife and I said we want it. :hammerhead: It was one house with an apt on the side and a house in the back.The city had it listed as a duplex We offered them $150k they came back at $160k at $155k it was on the way to being ours.We went to the city and after a few very friendly visits to the city planning board were were able to get them to remove ALL $45k in fines If we removed couch from the fron yard ;D We then closed on it hard money and in the next 3 months spent close to $50 in remodeling until we got to hooking back up the electrical that was only 2 meters when we bought it and we wanted 3 (1 for each unit) Only for the electric company to tell us you cant hook up the 3rd meter because there are only supposed to be 2 units there DUPLEX remember.I said but look there were three when we bought it.They said I dont care you dont have a certificate of occupancy for the 3rd unit.I called the city and said now listen the electric company is telling me I dont have a CO for this third unit and wont hook up the electric to it can you help me.THey said well let us come see what is going on ,They looked at the property and said it looks safe to us you had all your permits pulled for yuor work Ill have your electric on by tomorrow ;D and sure enough there it was.We have put about $75k total into the prop in the last three years and it was cashflowing good till we took a little money to pay some other expenses and the tax and ins. doubled ,now its breaking even.However if you have been following the math you will see we bought it for $155k put about $75k into it, thats $230k we had it appraised 2 months ago to accuratly value it for a purchase that was full doc and needed to see true assets and it is valued at $850k .What do you think the guys that walked away from it three years ago are saying today?

It wasnt available for 2 years due to foreclosure under your thinking no property will ever be worth buying .Mike Mike Mike You offer sooooooooo much advise on what not to buy but never comment on your success.Do you have any? Do you buy retail that just hit the market?I never have seemed to make that work well.Whats your secret?

Unless your just bored and looking for something to do?


I think Albuquerque Dave gave you excellent advice. I argued against your first deal because it didn’t sound right. This one looks like a winner. Good luck.

Da Wiz

Well thank you mtnwizard you have been a world of assistance and education for me thank you, I see you have keeping pace with my off the wall one extreem to the other thinking.We have decided to stay with residential for now cause that is what we know . We plan on rehabbing a few holding a few collecting them throughout the midwest.Yes its far from home but we like to travel ;Dand well thats is all we’ll be doing is REIing yippee :smiley:


Once again, you respond to my post with a personal attack. I’m done responding your posts.

I think that you summed it up best yourself:

I have been frantically trying to find a comfort position to invest in to get out of my day JOB

Yes, that’s you - FRANTIC!

Good Luck,


My arent we sensitive :-\No need to get hostile over a simple ?Mike you obviously are missing the point.of my remarks .You look at a request for information as a personal attack?