All Forum Posts by: Dustin Lunceford

@Joshua VanName Thanks!  I'm familiar with owner financing.  When offer on off market properties, I usually include a cash prices and financed prices.  The part that is most confusing is the offer price.  I get that offering over is sweetening the deal for the seller.  On the land deals are you paying interest?  

Also, the listings I have received these offers on are all in a good part of town, priced competitively with comps or a completed appraisal, and either recently renovated or not needing much updating.  Targeting distressed properties and making creative offers makes total sense.  If there was room to increase the value after purchase, then I would understand the approach.  I am confused by the idea of paying 10% over the value of a property just because it is an owner financed deal.

@Jason Taken Thanks!  I'm familiar with owner financing and the benefits.  These purchase prices offered are not supported by the value of the properties.  I would expect all of these properties to appraisal close to the asking price.  

I have had a good bit of investment property listed over the last year.  I have recently received calls/verbal offers on a few of my properties that have me scratching my head.  Each of these offers has been $20,000-30,000 over the asking price with owner financing.  I have asked if someone is teaching this offer structure and one person said it's common in land and the other explained it as a win-win situation.  I asked questions of the win-win buyer and after a little back and forth, it seemed like the buyer is just overpaying for the property to get owner financing.  My two question are:

Have other agents had similar type offers on any listings? 
What am I missing that makes this a desireable offer structure?

Investment Info:

Single-family residence fix & flip investment in Pearl.

Purchase price: $126,500
Cash invested: $19,495
Sale price: $187,500

This was a good house that just needed to be updated. We updated a few things, removed some eye sores, and made needed mechanical and electrical repairs. Add a few new appliances and a lovely young couple got a pretty good starter home for their family!

What made you interested in investing in this type of deal?

The opportunity to do another flip after a number of years without one that was a pretty light rehab.

How did you find this deal and how did you negotiate it?

We found it through a wholesale company on Facebook. We negotiated with the wholesale company and were pretty firm on our terms.

How did you finance this deal?

We financed this deal with a private loan from a family member.

How did you add value to the deal?

We updated the flooring and kitchen. We added new appliances, removed some old falling down fence, and completed small mechanical repairs that brought peace of mind to the buyers.

What was the outcome?

We sold the house for a little under asking price in about 2 weeks. We netted on the higher side of our projections. And we have a great since of pride in having successfully renovated and sold a property.

Lessons learned? Challenges?

Vet your contractor. We had a rough go with our first contractor. That experience did teach me to trust my gut, question when things seem a little off, and when enough is enough, end things.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I am an agent. That was helpful in properly comping the house on the front it.

Investment Info:

Single-family residence fix & flip investment in Pearl.

Purchase price: $126,500
Cash invested: $19,495
Sale price: $187,500

We purchased this from a wholesaler. We replaced the floors throughout with LVP and carpet. We replaced the kitchen countertop and sink, put in a new range and refrigerator, did some light landscaping, and completed all necessary mechanical repairs. The previous owner had recently painted, so we touched up what needed it and completed the baseboards following the floor installation. We decided to leave the wallpaper in the kitchen because it was in great shape and it gave the house something to be remembered by, good or bad. It was on the market for a little over 2 weeks.

What made you interested in investing in this type of deal?

The opportunity to do another flip after a number of years without one that was a pretty light rehab.

How did you find this deal and how did you negotiate it?

We found it through a wholesale company on Facebook. We negotiated with the wholesale company and were pretty firm on our terms.

How did you finance this deal?

We financed this deal with a private loan from a family member.

How did you add value to the deal?

We updated the flooring and kitchen. We added new appliances, removed some old falling down fence, and completed small mechanical repairs that brought peace of mind to the buyers.

What was the outcome?

We sold the house for a little under asking price in about 2 weeks. We netted on the higher side of our projections. And we have a great since of pride in having successfully renovated and sold a property.

Lessons learned? Challenges?

Vet your contractor. We had a rough go with our first contractor. That experience did teach me to trust my gut, question when things seem a little off, and when enough is enough, end things.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I am an agent. That was helpful in properly comping the house on the front it.

Hi,

I am trying to help a client figure out the costs to run utilities and pave a street to develop a parcel of land.  The parcel is about 17 acres.  There would be one street that runs the length of the parcel with lots on each side.  The length of the street would be about 700 yards, and I am also trying to include power, water, and gas.  We could get about 30 lots on the parcel.  Any guidance is welcome.  Thanks!

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $132,000
Cash invested: $30,585

This house is a small 2/2. It is on a quiet street in a highly desirable area due to desirable school district. We inherited tenants and self-managed. We are learning a lot. The tenants have moved out, and we are working on getting it turned over and re-rented. I'll set a reminder to update in a few months.

What made you interested in investing in this type of deal?

Cash flow. Earning income every month, and building that amount to an level of financial independence!

How did you find this deal and how did you negotiate it?

I found it by cold calling absentee owners. We negotiated person to person over the phone.

How did you finance this deal?

I financed it with a traditional bank on a 30 year note with 20% down.

How did you add value to the deal?

The biggest value add is bringing the rent to market rent.

What was the outcome?

We have cashed flowed a few months. We plan to have it rented by the end of the year with increased cash flow.

Lessons learned? Challenges?

Get an inspection! We are dealing with HVAC issues that we would have found with better due diligence. And get automatic transfer orders set up with the utility companies so nothing gets cut off.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I am an agent and worked the process myself. I am probably going to start using a property manager. Bo Smith with NextHome will by my manager!

Meetup this Thursday

Hey, the link above is to a meetup we are doing this Thursday at Cultivation Food Hall at 6:00.

Hey Everett!!! I'm so glad to see you are doing well and are having some success with house hacking. I'm not sure I have much to add about the HELOC. We should grab lunch or coffee soon!

Speaker Adam Johnson talking about creative finance.