All Forum Posts by: Elrick Lounds

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Hello - Was working on a deal this week that fell through and was hoping to get feedback on my approach, and my backing out of the deal.

The home was a 2/1 single family home that was listed at $59,500 plus a lot next door with a dwelling that wasn't livable next door for $30k.  Comps in the area around $90k for the lot with the property and about $25k for lots.  

The deal I had under contract was:

70k for both properties, Seller Financing, 30 year Note, 5 Year Balloon Payment, 6% interest, 15k down.

I had the home inspected, and also had a contractor come to give a quote on repairs to get the property into a rentable state.  The repairs were about $20k.  

With the out of pocket for repairs exceeding my cash and down payment I looked to credit for the repairs which would put me around $400 dollars a month.

Rents in that area comp around $850-900,

-$366 for the mortgage

-$400 for the repair note

-$100-200 Additional Expenses

Ultimately with these numbers I decided to back out.  

Any insight on different approaches or avenues I might have missed would be helpful.  Or maybe my analysis was correct and it actually wasn't a good deal for me.

Look forward to hearing back from the community.

EL

My wife and I are in the process of closing on our first investment property next week.  At this point trusting the process and leaning on what we have learned thus far...which is nerve wrecking and exciting at the time.  We are based out of Fort Worth - would be great to connect with other BP members in the area as we navigate the process.