All Forum Posts by: Bryan M.

That does sound like a decent deal but you have to be careful in those areas, there are war zones in and around springfield and worcester, but there are also good areas, I focus my investing in worcester area.

Where and how do you find these deals? I use craigslist and mls alot as well as brokers.

Ok, so here is an update. I met with the seller last night to talk about a deal. In our emails he sounded interested in my offer of 155 with 14,000 down, seller finance the rest. I though that was a fair deal and the absolute highest I would pay for the property. I was looking forward to working out some numbers and though the buyer was interested in my offer.

When we met he showed me an email from another buyer that was offering 170 with 17,000 down. The seller said if I was willing to match that he would do the deal with me because we spoke first. He wanted to finance the deal interest only until I could get conventional loan. No way I was going to agree to that or the purchase price. Looks like this deal is not going to happen, I am bummed out because I though it was a good deal for the price I offered him. I am planning on contacting the seller in a few weeks to see if the deal actually went through, maybe it doesnt and I will have another crack at it. One thing I found strange was in the email the seller showed me the other buyer mentioned he was not interested in getting an inspection, that is a big mistake in my opinion as I would have gotten inspection and after maybe negotiated a lower price. Also I have some suspicions about the email, from talking to this guy I got the impression that it is possible he fmay have fabricated it to try and get me to bite on a higher price.

Who knows but I am alittle bummed that I could not get the property. I will keep looking and stay conservative.

I am working on a deal right now for a 3 family, the numbers look good and the seller is offering owner financing, which is attractive, also he is negotiable on price. There is currently one vacancy and the other two apts are rented out without leases, last months rent or security. Do most investors choose to have the seller evict all of the tenants before the sale goes through and have a vacant prop? Only problem with this is short term carrying cost until vacancies are filled. In the long run this strategy would probably save money because these current tenants sound like they would be problems for me if I buy. I would prefer to screen all tenants myself.

If I do request that the apts are vacant I will also have to paint and possible recarpet, that is also an expense to consider.

Any thoughts, also do these associated costs such as repainting, recarpet and finding new tenants factor into sale price and by how much? Thanks for the feedback.

UPDATE

I got an email from the seller last night saying his wife was on the fence witht the offer and would like to meet to discuss a deal. I was not expecting this because when I spoke to him before I sent my offer I asked him how firm he was on his 175,000 asking price and he responded by saying he wouldnt go a penny lower.

I set up a meeting with him for this saturday. I will close this deal if I can in fact get it for 155,000 with seller financing. Any thoughts or advice? Thanks everyone for thier input, it has been very helpfull.

Ok, after working on this deal for awhile last night I was able to come up with an offer. The max price I worked out I could pay for this property is 160,000, so I worked out an offer and sent it to the seller this morning, it is as follows

155,000 sale price
14,000 down
141,000 seller finance @ 5.75% is about 820 payment.

at this price the numbers would satisfy the 50% rule as well as 100 a door. I dont think the seller will agree to this, last night when I spoke to him he told me expenses were 6500 last yeat, that may have been fixed expenses but he did not acknowlede other associated expenses such as vacancies, renovations and repairs. Also when I spoke to him about the condition of the roof which is visible worn hes response was it didnt leak. Maybe not now but it will and will have to be replaced. Also I will have to find and screen new tenants because the tenants in there dont have leases or security depost.

If I put 14,000 down my cash on cash return will be around 30%. that would be a good return and if I could get this property at this price this would work out to be a good deal.

I dont think he will accept but I will be able to go up to 160,000 if I need to but that would be my max offer price, next step walk away and find something else.

Any thoughts.

I saw the property yesterday. The property will need a new roof in the near future but does not leak now. The 3 apartments are in decent condition but will need cosmetics when tenants move out such as rugs and paint. There is a basement apartment that is mostly finished that I was unaware of, but will need some work to get it to rent out, this would be a 4th apartment for the property. It is a two bedroom and would rent for 700. With all 4 apartments rented potential monthly income would be 3100.00

I found out the property was under contract with the neighbor two years ago for 180,000. Sale didnt go through because the buyer could not get financed. This property has lost value since then. I am going to put together an offer tomorrow and talk to the buyer.

Anyone have any advice on presenting an offer without the seller feeling it is a lowball offer and not taking it serious? For the right price this would be a very good deal. THanks for the feedback.

You were right, the house is located in worcester on a main road with public transportation. I have another on in worcester I bought for too much so with this next deal I am being very careful to find something that cashflows well. The house has no lead as it was gutted to the studs in the past 10 years, it does however need a new roof. Most of these 3families in worcester have slate roofs, they last for 50 years but are expensive to replace. I think 145,000 would be a good price for me. Where are your properties located? Are you having any problems with them?

Ok, jsut got some more infor regarding the mortgage on the property. Seller is asking 175,000 with 10% down and is offering seller financing. I found out the seller owes 65,000 on the mortgage that was taken out last year on the house. That is good news that he hasnt stripped all equity out of house. I think this would be a good deal if I could get it for 145,000, not sure if the seller will accept that offer but I will be going to see it saturday, I will keep everyone posted. Anyone have any thoughts? Thanks for the replys.

If I could get this property for 120,000 I would be very happy, that would be a good deal but I dont think the seller would be willing to go that low. I have some info on the property and have done a drive by but will be going to the property this weekend to look inside and talk alittle more with the seller. If everything looks good I will spend the early part of next week putting together an offer. I agree, 165,000 would not be a favorable purchase price for me but a 30% discount would be tough to get. It is very important to pay the right price so I will take my time and move on if I cannot get it for the right price. I will keep you posted.

One question though, how do you find sellers willing to accept 30% disount? 30% discount for rental properties does sound like recipe for success.

Ok, so in the market I am looking at the city is full or 3family properties. A majority of them are priced between 170,000-225,000 and some of the short sale and auctions are going for lower but may need work. Market rent for a 3bed 1 bath is 800-850. What would be a good deal in this market? What would some of you look for. I was thinking 165,000 at the higher end of an offer price would be a good deal assuming 2400 from montly rents. I think this area is depressed because of current market conditions as well as the quantity or forclosures on the market. In time these properties will appreciate, a few years ago there were no deals worth while in this area due to such high selling prices. What are some thoughts? Sorry for continuing this thread but I am interested in purchasing another property and want to make sure I can find the right deal, also it seems there are so many people with so much insight on this board I could really learn from. Thanks for all the responses!