All Forum Posts by: Heston McBride

Haha I’m sorry I probably wasn’t very clear. Bear with me here. I’ll just answer your questions directly, But 1st let me clarify something. I don’t plan to do a land contract to buy the property. I’d like to put 20% down of my own cash ($8300 like you mentioned) and finance the rest. This should make my payments around $315 to $350 at the most depending on interest rates. From there I would seller finance back, via a Land Contract Purchase according to your statement. I’m sorry I wasn’t familiar with that term.

To your questions..

1. It would lower his monthly payment by $50 but like I said more important he would be receiving about $4000 in cash after I purchased the property.

2. Proposing a Land Contract Purchase back to the original owner at $450 a month it would cash flow at min $100 a month short term and at $50k purchase price it would be a $9k gross at the sale date.

*For questions 3 and 4 I think I’ve already explained they wouldn’t apply.

Thanks for the response.

I’ve found a home owner who’s in a bit of financial trouble and I’d Iike to see if I can offer him a solution. Basically he’s gotten into a cash flow issue and is having trouble keeping up with his house payments and some other bills.

I’m new to investing so this will all be new territory so I’m looking for some insight or advice from those that may have been there already. I think I may be in a position to help him and make it a good deal for myself as well. Looking for a win - win here.

Several months ago he purchased the property for $39,500 and put about $3k down. His current payments are about $500/mo. (Really High, He has terrible credit) like I mentioned he’s having trouble keeping up payments and I’m considering offering to purchase the property in order to help his cash flow problem.

I'm thinking to purchase the property for around 41k with either a conventional loan or possibly some private money (open to BP lenders if anyone is interested), ARV should be around $50k to $55k. I would then lease option or owner finance the property back to him.

My 1st thoughts were to lease option the property back to him. The deal I had in mind would be a 2 year lease option at $450 per month with a sale price of $50k and $50 each month going to the final sale price. This would lower his monthly payment by $50 but more importantly it would put around $4000 back in his pocket immediately. Not a huge gain for me here at these numbers but I’m looking to help him out and not make huge profits.

I also considered owner financing but not sure what a good deal for each party there would look like.

If I finance the deal with either conventional financing or possibly some private money, depending on interest rates with 20% down my monthly payments should be around $315 to $350. Leaving cash flow around the $130 to $100 range per month but a small profit upon the sale. If the sale goes through it should be about a 40% return cash on cash. If he’s unable to purchase at that point we can restructure.

let me know if any of this seems to make sense or better yet does it sound terrible? Coming from someone who’s never been there, this is all theory at this point. 

Like always I appreciate and input you guys can offer.

Understood. Wow the support here is jaw dropping. Definitely feel better about how to approach this deal.

Big thank you to all of you who responded. BP’s does it again.

@Cassie Montalvo

Help me with my confusion please.

You mention using an agent that represents only me. The house is listed with the same company my selling agent works for. Is this not a conflict of interest?

Will I still get good representation?

@Kevin Sobilo

Sound like I’m getting my answer pretty quick and I really appreciate this advice. I sounds pretty clear that I need to have an agent representing me.

This does bring up a new question for me though. The selling agent and listing agent work at the same brokerage company (which is quite small I might add).

Would using an agent at the same listing company be a good idea or would they have reason to not represent me as well as an outside agent would?

Once again thanks for the info and Bear with me as I learn here.

@Ted L.

That makes sense. Not trying to be cheap here or unethical. It just seemed like a steep price to pay for such a short time spent.

As soon as I left it hit me. Looking back I should have waited and just gone to look at the home with the owner at a later time.

Like I said this is my first purchase ever so I’m just trying to figure out how best to handle it.

I’d like some feedback on how the bp community feels about my situation. I looked at a home w/ realtor but know the owner very well and had discussed it previously.

I plan to put in an offer on Monday for a rental property I really like. I know the owner and listing agent of the home very well but there’s some gray area as to the selling agent and the commission. I was looking at a different property with a selling agent and decided while I was near the neighborhood, I wanted to take a look at this property in question. I went by the property with the agent and made a run through.

This is my first home purchase ever so I’m an absolute newbie. Basically after I spoke further with the owner of the property about the home, he suggested I just put in my offer with the listing agent.

My question here is how should I handle putting in this offer? At some point I would like to expand and gain more rentals in the area so I don’t want to upset this selling agent but at the same time I’m very comfortable putting in a offer by myself plus I honestly had known and visited with the owner about the property previous to looking at it with the selling agent.

there’s a 3% commission in question on a 150k property.

Hope this makes some sense. Does anyone have any advice? Thanks in advance.

Thank you. Looking forward to it.

Bigger pockets looks like a great community. Just wanted to stop in and say hi to everyone. Like the post says I'm from the central Tx area. Haven't made my first purchase yet but I'm interested in starting with single-family rental properties then moving to multifamily/apts as soon as possible. Looking to learn, network and enjoy the process as much as possible in the mean time. God Bless!