Jacksonville, Florida Newbie Need Advice to Close First Deal

[PeTika T.]

Hi All! My name is PeTika and I have no real estate investment experience other than purchasing my first home this year. I bought in an older neighborhood that has a few vacant homes, and hope to convince the property owner of two of them to sell one to me. 

My 9-5 job is educating middle school students (Love it!), but my goal is to generate passive income through investing in Single-Family homes and renting them to people that were credit challenged in the past, but have made strides to be more reliable (my heart is in helping others). Specifically, in my area there are homes on the older side of town that are very desirable because while they are not on the up and coming side, they are in what I call "little gems" boasting large yards and great neighbors. Many are still owner occupied, but the trend has been as the occupants pass away, the homes get passed to heirs that don't want it, and then the home becomes dilapidated. I have identified several areas that can be profitable and want to help save the neighborhood while building my portfolio. 

I will start with a buy and hold strategy but also have a goal of eventually offering rent to own options for buyers. 

I found BiggerPockets while educating myself on the business and have been in love ever since. I am dedicated to learning something new everyday, and am trying to align myself with people willing to share some knowledge to help me achieve my goals. I'll reciprocate that help as much as possible.

The home that I want to invest in is owned by an investor with over 200 properties. The house I want has been vacant for 2 years but has great potential. The owner said its not up for renovations yet, so it isn't a priority.  He will entertain an offer, but isn't motivated to sell, even though he isn't getting income from it.  He keeps telling me he'll get back to me to walk through the property, but I think if he felt I have the money (which I don't), he'd be more open.  I estimate the house to be worth $55K after renovations and would like to offer $25K. It'll take about $15K to update (I hope, or less), but I plan to rent at the going rate of $750 per month in the area. Any suggestions on what may help him sell and how I can fund the deal? 

 I know this is a lot and thanks for your time in reading and responding. Be well!

[Gregory L.]

Good morning PeTika,

What side of town are you referencing? Sounds like it’d either be around Murray Hill, Springfield, or the north side.

It sounds like money is the issue with the guy. Sitting on 200+ properties, with no real interest in selling, and being unbothered by vacant properties costing him money annually are indications he’ll likely only be entertained by cash offers, or those not complex in nature. I’d say try to contact the smaller, local banks for their mortgage options. Some will finance as little as 50k.

You also may want to re-evaluate your 15k estimate. An older home that’s been vacant for at least 2 years will most likely require a lot more than that to simply be brought back running, let alone be updated.

I’m not sure the extent of your conversations with the owner, but have you straight up asked what it’ll take to get the home?