All Forum Posts by: Fong Xiong

Quote from @Alecia Loveless:

@Fong Xiong Go with your gut feeling and reach out to her in as many ways as possible. Write the letters. Send the texts. Contact the relatives by mail or text too.

I just got a steal of a deal where the sellers agent showed the property about 15 times but then spent over a month sitting on the listing and not putting it on the market. Finally I said to my buyers agent we are going to make a full price offer with a deposit check. And he said we can’t do that it’s not listed. And I said yes we can people offer on unlisted properties all the time.

So we made the offer. And both my agent and the sellers agent work in the same firm. And the owner of the company made the sellers agent present the offer to the sellers and they snapped it right up.

I think there would have been a bidding war if it had been listed because it’s in a very expensive town with a view of the mountains and I’m repositioning it which any new investor would have done and is already making twice as much in rents.

By November it will be worth twice what I paid for it.

You take as many chances as possible to get that property. If you annoy a few people but get a great deal if will make a good story down the road.

Thank you Alecia, maybe I'll try reaching out again in the morning. Although it's already in pending now. Perhaps maybe i have a slim chance. In my opinion i shouldn't be rejected with my offer if I've given her, she should accept if i pay her the equity gain over the course of 3 years. Unless she needs the money immediately to fund another project.

But at that age, I'd assume she is already retired, and perhaps i can inquire about her situation if i had the opportunity to speak to her and possible find a solution to her needs if she has any. But agent is my biggest blockade right now unfortunately.

*Edit Update*

SO... I actually nearly forgotten a huge factor as I went back to run the numbers again to see if I can work out a better financing that could be more appealing. I somehow forgot about the equity that she has been paying for the past 3 years on the property.

Purchase in 2017 @ $550,000 w/ IR of 4% which calculates her monthly mortgage to $2,624.46

$26,24.46 * 36 months = $94,477. 36

Owed mortage after 36months = $455,522.64

Her actual equity is actually $164,477.36 at her asking PP of $620,000

So, I've chanced upon a 4flex 16bd 8ba multifamily property, and the seller's agent isn't doing their best job listing the property so it's been on zillow for a few months now. But he refuses to talk anything in regards to creative financing. Couldn't really answer some of my inquiries in regards to the property itself. 

Is there a reason why seller's agent are so against creative financing? I have an offer that could benefit both the seller and I but it seems the seller's agent won't acknowledge the offer. The seller's equity on the property is no more than $70K at best, and I'm willing to pay their asking price. But seller's agent won't entertain the offer. At their asking price, the seller would net proceeds no more than $15K-$20K at best after all fees that would eat up her net proceeds.

PP asking: $620,000
Home was bought: In 2018 @ $550,000

Offer was to pay her cash $20K, possibly 30K if she's willing to finance me the $40K on a favorable term. 
Any funds still owed, if "she got kidnap by aliens"(Got it from Pace Morby) the proceeds would continue to be paid to her kids or family members. 

So I went ahead used my own resource to trace the owner of the property, and it seems to be a lady in her mid 70's who is living outside the state. So I've tried reaching out but couldn't get ahold of her. Whether through phone call and leaving a voicemail or via SMS text messaging. My sources also gives me contact information of her relative. Is it ideal for me to proceed to contact her spouse or family members? Is it weird or rude in any way for me to proceed with this thought? Will I be offending the "owner" in any way by contacting her family member just to get ahold of her? 

My thought on this is the following:

1.) Maybe when I called from an unknown number that is unfamiliar to her, she probably just went ahead and block me or marked my number as spam since it's also an out of state area code that is calling her.

2.) Maybe health conditions is the reason why and she isn't able to return my call and why she is selling the property with little to no equity when she could hold it for for a year or two for a larger equity. Considering the place is a few block away from a University I attended and the rent cost for such area is great. Calculating cost for cash flow is about $1600/month for the property.

I also entertained the idea of mailing out my offer for her property, but my sources is showing more than 1 "current" address so I was skeptical about entertaining this idea. Maybe I could try other source to find her actual current address. 

Any ideas or advice whether it be on better structuring my offer or how I should proceed on contacting her in regards to buying her property would be highly appreciated! I'm still very new to RE investing so please don't mind my inexperience actions. 

Thanks in advance,
An Inspiring Investor

 Thank you Arif!
Those are some great things I have also considered. One of your last comments in regards to due diligence is also of my concern. Due to my inexperience, I'm not 100% sure I've done all research and appraisal of the property. Mostly in concerns of rehab and repair cost due to my unfamiliarity of the craft. 

Probably something I had totally forgotten to mention is, it has been listed for over 60 days. So I figured the seller might be intrigue in the idea of me taking over the mortgage. The idea cross my mind that I could cash him his equity of $70K, but times and times again I hear cash is king whether in podcast or any RE books I have read, due to how much opportunity cash could do for me in RE. 

So I thought it might've been a good idea to put that cash in reserve in case of vacancy, capex and etc. early on into my investment. Or potentially invest it into another property once my first investment was a success. 

And my incentives that they would be willing to do a subto was:
-Their equity on the property is 70K, his closing cost would be around roughly 31K
-And roughly around another 5-7% for his agent fee through a traditional sale. And not accounting for any non-negotiable expenses that would eat their net proceeds. 
-They would have a higher net proceeds from just letting me take over the mortgage plus interest on top depending on terms. 

Also please forgive my inexperience, I'm just kind of throwing things out from what I read from books or listening to podcast. And they may not be particularly correct. 

Also thank you for the information and suggestion Noah! If you ever need any help, although I'm inexperience, I'm dedicated and willing to help for free to build experience and knowledge towards the craft of RE investing. 

First off my name is Fong, I'm 29 years old, I'm very new here. I have been listening to David and Rob for weeks on end on their podcast on my commute to work and have read through a few books from Brandon Turner and it has given me hopes on eventually being able to escape my 9-5 job. Have bought many other books in preparations from other successful investor such as David and Rob but in the saying of Brandon, "it doesn't matter how many books I read but if I don't take any actions it's all doesn't lead anywhere." So here's me taking my first big step to financial freedom. I also apologize in advance but I'm really "green" in regards to real estate and not 100% confidence yet in my capabilities but I have chance upon a opportunity on this property that I'm looking to give it a shot.

Long story short, I chanced upon a 4plex multifamily home with 16bds 8ba near where i went to college and it's a few block from the University. The avg rent around the surrounding areas are about 1700-2200 for a 4bed 2ba apartment.

PP asking is $620,000 at 4% IR

Using the Rental Property tool I would cash flow about $1600 monthly after all expenses and with a CoC ROI of 9%.
I would need about $20-30K rehab: new carpets, new paints inside, new tiles.

My inquiries is, what are some creative finance idea could I pitch to the seller and his agent in regards to his equity of the property which is about $70k if they are willing to do a subject to deal for the property?

In what ways can I structure a deal that would still make a profitable cash flow if I have the owner seller finance me the $70K? Or should I just outsource for a private money loan for the 70K?

Thanks in advance for any tips and advice!