Is this a buy? - Posted by ss


#1

Posted by Jimbob on October 13, 1998 at 11:40:45:

ss,

This is not a grand slam on the other hand it doesn’t sound like a bad deal either.

It all depends on the terms of the financing, I would offer $36,000 and do the repairs with my own money and labor in exchange for the down payment, have the seller finance the balance of the purchase price @ 8% over 30 years with monthly payments approximately $300 PITI. Assuming this house is not a bad rental area, and you can rent the house for $450, and the tenant you put in there will pay all utilities, you should clear around $150 per month, plus have somewhere around $10,000 equity.

I would probably do the deal on those terms and just look at it as another property acquired into your investment portfolio, find another and do it, and so on. It doesn’t take long before you have a nice portfolio of properties, then you can think about moving into larger properties.

My 2 cents…

Jimbob


#2

Is this a buy? - Posted by ss

Posted by ss on October 13, 1998 at 11:11:13:

Spoke with a seller who’s mother recently died and left her a 3/1 rental house in a fair location. She’s asking $39,900 and willing to hold the mortgage. After checking, there are two more houses on the block listed with an agent for $49,900. The house needs exterior painting and a subfloor replacement in the bath. Repairs could be done for around 2K. The property could be rented for $450 a month. Is it worth the hassle? Thanks.


#3

Re: Is this a buy? - Posted by phil fernandez

Posted by phil fernandez on October 13, 1998 at 18:19:37:

What’s the house worth. You mention that two other houses are listed at $49,900, but are these two houses at FMV or not. You need to know your local market. Perhaps these two houses at $49,900 are overpriced.

Let’s assume that that the property you’re looking at is worth $39,900. If this is what the seller is asking I’d offer $30,000 with the seller carrying a note at say 6% long term. Through the use of owner financing you have just created some positive cash flow and a nice little long term investment.