All Forum Posts by: Brian Pleshek

Do you have a good credit score and job?  You can probably do better with a bank loan and buying a deal.  Anyone doing seller finance isn't likely to offer you a great price on the property.  So unless you think you can add value, it's probably not a winning deal unless you have no other way to acquire property.

Brian

@Bill Gulley

Maybe I need to check out your academy.  One can never know too much.

Brian

Thank you @Bill Gulley for your well thought out post.  I had already decided to drop the subject to option and was just looking at the deal as a cash deal.  When I talked to her, I told her that since I knew her daughter I would give her the best advice I could.  I explained how an investor thinks.  I gave her a little information about how they calculate a deal(ie 70% - expenses).  She told me that she had an offer that she had originally rejected, but that it was still open.  I told her honestly, that I might not be able to beat it based on the numbers but told her I would look at it.  Personally, I think that she should take the offer.  Based on a quick analysis of the numbers:

80k offer + buyer pays closing costs

110k ARV

That's 72%

My guess at the rehab would be $3-4k. This sounds like a bad deal to the out-of-state, sight unseen investor. I think she should take the money and be glad it pays off her mortgage. I can't imagine that another investor would pay more. Since it doesn't qualify for FHA(because of the garage mentioned above), and add to that the timeline of her foreclosure, I can't imagine a market value sale coming through.

Thoughts?

Brian

You're either going to have to learn to estimate or pay some one.  As you start doing deals and doing renovations, you'll get some data points on how much things cost.  It's also possible that after you use a contractor a time or two and he has gotten some of your money he may be willing to give you some freebie estimates because now you're more of a sure thing.

Before you buy the property, the contractor might be thinking that I'll have to visit 4-5 properties for this guy without compensation only to maybe not get the work after all.  Having an existing relationship will help.

Brian

Good points @Karen Margrave and @Joel Owens.

Welcome to BP, @Michael McNeil.  

Ok, so I talked with the lady for 2 1/2 hours yesterday so I have a much better understanding of what is going on.  We spent probably the first hour talking about her problems, what happened, etc.  And I gave her the best advice I could as to what she should do to make things better, easier.  Just talked as a friend.  She's a very nice lady that has had a lot of bad things happen to her and has had some bad advice given her in the past.  I let her bring the topic around to the house when she was ready.

So here is the deal and I already have my thoughts on it, but I wonder what you all think about it.

Vacant for a week

Bi-level on .28a

45 years old(1971)

Listed as a 4/2 finished basement except laundry

98 DOM.

Price History: 104.9/99.5/95.5  (Commission 6% + $199)

Taxes 2396/yr

Electric stove, gas heat and water

basement wood fireplace

Hot tub and above ground pool with deck.

Loan situation:

1st ~55k: $604.01/mo(taxes escrowed, ins not).

HELOC: ~4500 $70/mo

11 months non-payment

Taxes last paid in June.

Rent-o-Meter 80% of rents 4BR: 875 - 1300

Rent-o-Meter 80% of rents 3BR: 845 - 885

While talking to her she stated that while the basement is finished, the basement floor is painted gray, so only walls and ceilings. Also found out that the master bath is a walk in shower and the second bathroom has a tub. She said that the FHA wouldn't approve financing but didn't know why. After talking to her for a bit more, I think it might be because the 4th bedroom is in the garage. So no garage. They walled it up, but left the garage door. They also made a study out in the garage. The pictures show that the majority of the back yard is deck with a hot tub and pool in the middle. While it is an above ground pool, it doesn't look like it from the pictures. The pool has a new liner but the hot tub has a small leak and a pump issue. Roof, AC and water heater are all about 5 years old.

She already had an out of state investor offer, sight unseen for $80k.  Negotiation went 77/85/80/83/80 firm.  She rejected it before I talked to her.

Thoughts?  (especially @Brian Gibbons)

Brian

@Brian Gibbons why only vacant?  Is this to protect me from something or is there a law or did you just figure it works better that way in the past?

If the prior owners were not in the picture at all as far as future rent and this is just a buy and hold, same thing?

I have so much more to learn.  :)

Brian

Set up a keyword search for Tampa and Florida and any of your particular types of investing or other interests.  It'll help you find threads that interest you.  You might want to narrow your scope, because it's easy to get overwhelmed if you try to learn about everything.

Welcome to the site.

Keep stockpiling cash and dropping your expenses down to 50% or less of your income so that you have a huge chunk to throw at your property when the time comes to pulling the trigger.

Brian