All Forum Posts by: Michael Seutin

Jon, you mentioned hard money loans, and they are in the double digits. Do you use them successfully and if so, how would you structure a deal to make money on a property that cost for example 50k before rehab, needs 10k or rehab and would rent for $1200 a month after rehab. I am interested to know how to make money on such a deal without using conventional financing or seller's financing ?
a break down please.

Jon, or others,
In your 70k example property, do you usually start the offers with a down payment and if so, what do you offer? 5%, 10 or more ?

Thanks Rich, that's real helpful.
Now do you guys get a real estate attorney to draw the seller's financin contracts ?
And do you suggest a third party to take payments, if so who do you contact for that ?
Lastly, I was thinking in asking the attorney to include a clause that would state that I would close upon contengency that inspection and appraisals come back without any big surprises, is this standard ?

Well actually I was including a balloon in my example, I am not experienced in seller financing yet. Looking for advise to get started.
To me the real attraction of doing buying with sellers' financing is not to have a conventional loan because of the 10ppty rules. So if I include a balloon the only way to repay the seller would be to sell the property, is that right ?
Or is there a third way to pay off the property without doing a conventional refinance or selling the property ?
Back to my original question: How do you convince a seller to accept no interest as stated above by Charles Parrish ?

MikeOH, that was the best explanation I could hope for. While I already understood that concept, now I really understand what you guys were talking about.
I guess I didn't think that it was actually feasible to do much better than a 1% ratio.
I now will have higher expectations and try to learn from you guys to make those 2% deal happen without placing large down payments. That would indeed fast forward my way to bigger returns, maybe infinite returns if no downpayment at all.
Every new purchase I realize I could do it better and expect better on the next purchase, learning as I go, I love your explanation of opportunity cost..
This site really inspire me.
Thanks

By the way, I am new to this forum, but I love this place and love being around pple who share my interest.

I am pretty sure I fully understand the 50% rule. It states that if your gross rent is $1000/ month, you should count on only $500 a month income after taking out expenses such as maintenance, tax, ppty insurance, ppty management fees and vacancies. From that $500 you deduct your mortgage payments and what is left is your true positive cash flow.
Now I still maintain that a ratio of 1% can be pretty good if you put 20% down, you will have in most cases true positive cash flow.
Am I missing something ?

Well my plan is to place ads in craigslist and local papers and I am entertaining the idea to create a basic webpage with more info on the terms I m willing to offer. The idea was to leave a link to the webpage in the ad.
But since I haven't created the webpage yet, I might just start with ads on craigslist and papers.
If you guys have suggestions as to where to place the ads and what to put in the ads, I would be interested to hear them.
I am new at investing, I have 2 rentals in Austin texas that I financed conventionally, I am about to buy a third one in dallas but right after this one, I won't qualify for conventional so I want to get started on seller's financing.

I want to attract sellers who are willing to seller finance their free and clear properties to me.
I am wondering how much should I reveal in an ad. should I mention some of the terms I am looking for such as 6% interest rate over 30yr fixe and 10% down payment. Or should I just say that I am a buyer interested in people with houses for sale willling to seller finance to me ? how would a good ad word it best to attract sellers.
thanks

Mike and Rich, thanks for the clarification, I understand that it is a screening tool and that the ultimate properties should meet the 2% rule.
Now there are a lot of areas where that's not possible and I am thinking that even at 1% you can become rich with cash flow if you put about 20% down each time.