All Forum Posts by: Christian Belleque

Than you for the tip. Once I started thinking about it again, I was trying to make the numbers fit. Thankfully the family doesn't want to take the 50K and run. Hopefully if the property doesn't sell soon, I can take over the mortgage for 2,200/month and have a nice rental property for 0 down.

3 days, but I have been talking to the sellers for a week now. It is right by my house.

 I know that they want a 20% down payment on their next house, around 275K. I am unsure if the neighborhood will support a house that is 500K even at a 4 bed. what do you think about buy and hold? In my thinking, 50k to get a mortgage around 2,200/month with 100k in equity already isn't such a bad thing. Anyone else thinking the same way?

@Jeff S the ARV I choose was a conservative amount. The likely ARV is more in the 480-490k range. All the sellers want is 50K. If I were to offer 297K, they would still owe 40K on the mortgage. In your opinion, what would be the best way to only pay 50k upfront and approximately 30-40k in rehab and still make a profit? or is it simply undoable in this instance?

I would ask the appraiser for his itemized appraisal so you can see how he got to the value. You have to take into account the fact that leveraging the money you put down will allow you to get better and better returns in the future as well. Possibly you can call the sellers bluff and show them the itemized appraisal and show them that the house is not worth what they are asking for and the CAP isn't that great either. Perhaps use a analyzed PDF on here and present it nicely. Also ask the seller why they are selling. see if you can create a win-win and give a little to get a little.

@ Curt Davis I agree. It should be more than $11,200. I really don't think it will sell for less than $450,000 more like $475,000-$490,000. I also do not think I will hold it for so long and that the holding costs will be that much. I do not think I will spend $40,000 on the rehab as well. So all of my numbers are almost too conservative to make an offer but even with these numbers I come out with a decent first time profit.

Thanks for your help!

It depends on if you are using it for a buy and hold or you are trying to flip. Personally, I wouldn't make a life or death decision on a buy and hold property that cash flows relatively well over a couple of thousand off the asking price. You could also ask the seller to give you concessions at closing ie. paying closing costs, credit towards rehab work. You don't have to forfeit your $1,200 investment over $8,000 that will be negligible over the long run.

Hey Everyone,

I have a potential deal that would be a flip. The sellers are a young couple that just had a baby and are very motivated. I brought up the idea of seller financing and they were very interested. They want to move to a condo and need 20% down to do a deal. Here are what the numbers look like. They are a rough estimate but are very conservative.

House listed for $434,000

Mortgage on it for $330,000

I would give them $50,000 for the title and assume mortgage.

PITI= $2,200/month

All holding costs including PITI= $3,000/month

ARV=$450,000(very conservative)

Rehab=$40,000(a lot of room to work with)

Hold for 6 months= $18,000

Total investment=$108,000

$108,000+$320,000=$428,000

$108,000 + 10% for hard money= $10,800

$428,000+$10,800=$438,800

$450,000-$438,000= $11,200

I know it is not  whopping homerun but an $11,200 profit for a first deal isn't too bad.

Now let me have it!!! Grill me with questions please and voice your concerns.

Very good story @Jerry Stone. I am 22 and I am extremely close to closing my first deal and plan on doing the same things you did. Thanks for showing a lot of us young REI people that it is actually possible to make it.