All Forum Posts by: Justin O'Kelley

Update:  So, I have purchased a few more houses since the last post in this thread and I am a little more knowledgeable about how this strategy is working.  I recently bought a house for $65,000 with the seller bringing all of my down payment (15%) and closing costs.  It all came out to me financing roughly $54,000.  The deal to doing this is finding a bank that will allow the seller to give the buyer credit towards down and closing.  One bank, which I had done a previous similar transaction decided they wanted me to have my own skin in the game and turned me down, but the other local bank in town had no problem as long as the cash flow worked out.  So, if you can find a motivated seller and an understanding lender this could be a great creative way to buy houses with no money down!

Justin

I use a local lender here in my town (First United Bank) and all of my deals are on 20 yr notes.  Another example is a house that the seller needed to net $20,000 on, so once he agreed to pay all costs we just raised the sell price to somewhere around $25,000 and all the costs come out of those extra proceeds, netting the seller his money and costing me nothing.  It also helps to have a realtor and lawyer who understand what your wanting to do when they draw up the offer and contract.  Nathan Gesner is right, essentially we're just moving the numbers around to make it work.

Justin

Hello guys and gals,

So I started investing roughly 6 months ago by buying a 3/1 SFR for $52,500 here in my hometown and thought I had stolen it from the seller, because I got them to pay half of all costs. The truth was that I had done an ok job on that deal, but the best was yet to come. My next deal was a 3/1 SFR that had been on the market for awhile, so I decided to offer on it and this is where I found my strategy. Asking price was $55,000 and when all was said and done we settled on $50,000, but the stipulation that I insisted on was that the seller pay every dime of closing costs and MY down payment! They agreed and I only ended up financing roughly $42,500 on it. This does not only work on houses that have been on market forever, I have done this on 3 of my rentals, which were fairly new listings. A tip that I will leave here is that if the seller is hesitant or says that they need a certain amount of money out of the house then you can adjust the sell price up so that they net out what they need plus all costs are covered. Obviously you will want to make sure not to go to high as to not make it a good deal for yourself. Have a great weekend everyone!

Justin

Hello all,

I am new to the Real Estate investing world and have my first two single family homes under contract, but I am wanting to get more immersed in the world.  My question is what are some good conventions, seminars, or get togethers for real estate investors?  I'm from Oklahoma, so anything close would be a plus.  Thanks guys and gals!

Lacey,

I think we are a little behind the bigger markets as far as climate, it still seems to be a buyers market here, but picking up as of late.  The seller was pretty motivated also, as the house was left by her parents as an inheritance to the grandchildren, so they wanted to turn it into cash pretty quick.  Hope you can use this strategy in the future!

Lacey,

It may depend on your lender/ local lending laws, but I just put my first property under contract for $52,500 stipulating in the contract that the seller pay all closing costs and fund the down payment (roughly $10,000 total).  I checked with my bank and they are ok with this, so it may be an option you can explore.

Jeremy,

I am also new to the real estate investing world, but what I did was find a realtor who manages/owns rental properties as well and told her exactly what I wanted to do, what my budget was, and asked her to show me some houses in my range.  She has taken me under her wing essentially and shown me the steps from buying to tenant screening to strategies to use down the road.  A good realtor is invaluable and one that is also an investor is priceless.  I would assume there are some in the Houston area, so I would start asking around and find one you want to do business with.   Good luck!

Justin

Karen,

Thanks for the reply!  In Oklahoma most banks make you put the taxes and insurance into the mortgage payment, so that figure was after that as well.  I have since backed out of the deal, because the house also had a termite problem and I have already found a new deal that I am going to flip if I can get it at the right price....probably going to offer tomorrow!  Thanks again for the reply!

Justin