@Sebastian Marroquin
I found our current rental as an off market deal. It was an old co-worker looking to cash out for a new truck, boat and to help his kids with college. As to your comment on there not being much meat on the bone, it had appraised in 2010 for $115k and I know things were a bit down at that point. He was asking $95k originally and then, after a year, he said he just wanted to get the cash, so that's when we worked out the deal, so I think the ARV SHOULD be more than $76k, but even at that, we're still OK. I guess we'll see in 6 months. However, I'm hoping to get better at finding those deals with meat on the bone as you said.
I like your comment about "so even if it takes you some months - who cares." I really want to get going, but I don't want to jump too fast. I think 6 months and a re-appraisal will really help. I will have 6 more months of research and knowledge and 6 more months of income. :)
I'm a very conservative person, and even more so with someone else's money, so I would never feel comfortable on only my second deal using someone else's money, but I like your strategy. No one ever laid it out like that for me and it makes sense. In this case, when you're saying about splitting "the deal" are you referring to buy-and-hold or fix-and-flip? I guess either could work depending on the expectations of both parties.
For your friend, how does he come up with ARV as $105? Does he have someone appraise it beforehand, or does he use his own experience to estimate. I'm concerned that I don't have enough experience, so let's say I buy a house for $50k, I determine it needs $15k in repairs and I determine that ARV is $95k. I certainly don't trust myself to be accurate on those numbers, so how can I be? I guess in my mind, I wonder, why should someone tell me that information and why wouldn't they just take the deal themselves?
So when I'm borrowing the money for this, are you saying to avoid the loans that may have lower rates but with payoff penalties in favor of ones with potentially higher rates, but I can refi with no strings attached? This seems like it should've been obvious as I type, but I never considered that. I always figured the low rate wins, but if I'm flipping (or refinancing) I guess that's when I can look for the lowest rate. Sound right?
When you say to let an investor come into my current deal, do you mean the one I have finsihed up and am getting income on, or do you mean the 2nd one I'm trying to start working on?
