Made my first offer!
Okay, so it's only been three days since I've become a real estate investor, but today I made my first offer!
It's on a 2 unit in a small city in Maine. The asking price is $107K (no broker). The monthly rents are $1,250. I offered $73K, payable with a $3K down payment and the balance with a 5-year note at 10% interest. I even threw in a $2K prepayment penalty if I flip it within 5 years (which I would do). The seller said she would take it to her partner and get back to me.
It seemed like a good deal to me. I would predict the asking price is already a good $10K below FMV. The seller is "motivated" and indicated this is the last of a series of properties they are selling. There is some finish work that needs doing, new windows, and some exterior paint. They have long-time tenants. I've decided that I would go up another $2K on the downpayment but that's it. Anything more, and I can't make it work. I don't have much cash to put on it. As it stands, even with a $5K downpayment, I would need to borrow money from my parents to pay it.
So anyway, I have no idea what I'm doing, but all I can say is, it's quite a rush! I figure, it's good experience just to be talking to sellers and making offers. I've kind of figured out, you don't brains to be in this business, you just need BALLS!!