All Forum Posts by: Samuel DeMass

I'm curious how some of the experienced investors would structure a lease to purchase deal, from the seller's perspective.

What types of things should be taken into consideration when selecting the rent/mo?  Is market rent sufficient, or should you shoot for more or less, and why?

Thanks for the replies, gentlemen.

@Leigh C  Thanks for the reply.  I was under the assumption that an attorney/title company could probably execute the transaction for us.  I think it is probably worth our time to track it down.

@Jerry W.  That's great insight.  I can hunt down that trail.  I appreciate it.

@Ned Carey  Great point.  The seller is someone that I know, looking to move out of the area and came to me first looking to get out of the house quickly.  I believe we can work out minor issues and work out the details as we go.

Welcome Kevin,

You've definitely come to the right place for unbiased information.  I've learned more on bigger pockets by listening to the podcasts and reading blogs than I did for the majority of my college career studying real estate finance.

I use professional property management on my duplex in a college town.  I've had a very positive experience.  Work has me a long way from the duplex, so having them take care of mostly everything is a real bonus for me, but if I was more local I think I would manage it myself.

I think it's worth seeing if your time is worth dealing with the day to day (or month to month) management of the property.  

If you're time is not making you more money elsewhere, then it's worth considering managing your own property until this becomes true.

I had a seller contact me, knowing that I buy rental houses.  It's in an area I know well, and can probably work a deal that will work for both of us.

How do we go about finalizing the transaction when we're done negotiating?

What's step 1-6?  Who should I contact?  My experience has been going through Realtors, but in this situation, saving both parties the marketing expenses is key to make the deal work.

Thanks for any insight!

Joel,

Great question.

In short, no.

In long, no.  I would never discourage you to educate yourself.  However, with a Real Estate Finance degree in hand, I can confidently say that you don't need it.  Would I be less successful in real estate had I not gone to college?  Probably.  However, I consider my ability to talk to anyone one of the greatest learning points of my college career.

On a separate note, if college is an affordable option for you, go.  Enjoy.  It's a great time.

@Hattie Dizmond , I hadn't really thought about the exit side, that is a great point!  I generally execute a buy and hold strategy.  While I see the potential for F&F, my current job scenario doesn't allow enough free time to delve into such ventures.

What is the process of selling outside of using a realty?  They seem to do some processes in the background, probably not significant, but I assume they are getting paid to do something other than open doors for me to look at a house.

@Tom Mole  , I thrive in a thick skinned community and I appreciate your feedback.  I have annualized the 

I am looking for multiplex properties, which is why these properties caught my attention.

Since my last post I was in contact with the seller again. He's made the unfortunate move to list them on the MLS. Is there an honorable way around this issue? I don't mind working with an agent, but I've done the leg work to find these deals off the MLS.

I don't really know any buyers at the moment that are looking for this property.

@Jordan Archer , I appreciate your thoughts!  I think I'm looking for a base hit here.  Unfortunately, my time is well consumed by work 6 days a week on the regular.  I'm not sure that I have the time to manage a rehab to nurse a property back, so I think I'm looking for a turnkey type property.

@Bill Jacobsen , What do you normally use for your vacancy/mngmt/repair costs? I've been going with a nominal 10% based on the performance from some of my other properties, which admittedly could have been pure luck. Since I was able to get an asking price from the seller and what he allegedly owes the banks to get out of the properties I was able to calculate a 10.117% CAP rate and know where his bottom line should be, depicted below. With this information what do you think?

I started when I was 18 (pre-2007), so things were a little different.  In effect, I had a partnership, with my parents.  They brought their good name to the table and co-signed for me and I brought youth and sweat equity.  We were able to get 100% financing, plus some extra for rehab (although we didn't call it rehab then).

I have always been a fan of the NAR. I've had a couple great agents in the past that really helped guide me and grow in my real estate venture. However, now that I have a pretty solid footing, I'm not sure that I need that person any more. However, with 6% off the top of any deal I'm trying to execute, is it worth it?

Alternatively, I have considered getting my real estate licence so that I can, at a minimum, capture 3% on my future dealings, and maybe even help other investors get their feet on solid ground.

Thoughts? 

I was doing my daily cruise through Craigslist when I ran across someone selling a duplex.  It turns out that he's got 6 duplex and 1 house for sale upon further communication.  The properties are what I would classify as B properties for the area.  He let me know the current rents on all the properties and informed me that they were all currently rented, and gave me the insurance and taxes on one of the properties, assuring me most were pretty close.  Of course, if and when I proceed due diligence will verify all information.

He'd like to sell them all, but he's willing to sell as many as I could take on.  I know I don't have the capital for more than one, maybe two currently, but I'm not sure if they're worth delving into.

This falls under the single or home run argument in my head.  I think at least a few of these properties, maybe more depending on the price could be good positive cash flows.  He seems motivated to get them sold.

I got my nerd on and I built a quick comparison tool in excel to analyze any potential deals.  Of course, the picture is static, so it captured the values I had input when I took the screen shot.  The estimated monthly rent being the actual monthly rent in this case.

Is this the type of deal that would be better suited for wholesale?