All Forum Posts by: Lyle M Smith

You're spot on. Thanks for the encouragement. I was thinking of making a professional itemized invoice for the rehab costs to try and prove to him my price is fair. Only an investor will buy this property with the condition it's in so maybe if I can convince him 200k needs to be knocked off the ARV for a purchase price to make any profit he will settle.

There may also be a better deal with an easier rehab that my realtor found so maybe it’s for the best. Can’t force a deal to happen!

If anyone was curious of the outcome…

The owner missed our appointment for the second day in a row. Both times he lied about being on the way cause then he admittedly said he could leave his house cause he couldn’t find the keys. This time he at least gave me permission to go in if I could get access.

The doors were jammed shut but just from friction so I was able to push them open. The 1 bed room apartment was completely trashed and the layout was pretty kooky. The ceilings were prob only 7 feet and there was extensive water damage. The main 3 bedroom part of the house wasn’t too messy but it probably hadn’t seen and maintenance or updates since the 60’s. Needless to say the property was a full gut and then some.

I still liked it but I started to lose hope after calling him to share my thoughts. He can’t get my name right, he thinks it only needs 5 grand to start renting it, he’s 68 and was a career land(slum?)lord. He wants 239,000 but it prob needs $150-200k and he claims he’s not taking much less than his asking. I slowly worked up to the idea of working out financing between us but he batted it down quickly. I plan to offer him $100k and expect an offended denial but at least he’ll have my offer if he reconsiders.

…on to the next.

Thanks Misty. I haven’t yet uncovered his debt on the property or what he intends to do with the proceeds from it.

I do know he purchased it in 2005 so chances are he has a relatively small balance on his mortgage but maybe not. I don’t think he needs an upfront lump sum based on some assumptions. He’s been listing and delisting the property for several years now so that tells me he’s not desperate for the money, also he is retired so he may just want some extra spending money. Also he mentioned he is now living in one of the wealthier counties in my area so sounds like he already has another house so he doesn’t need to 1031 and it’s not una cheap area.  (I know - a lot of assumptions)

I’m hoping he cares more about making the largest gain on his investment versus how quickly it’s paid out. In the event he wants the money quickly but not necessarily instantly I was thinking of offering to pay his asking price with $1000 monthly payments for the first year with a balloon payment on month 13. That will give me a year to rehab it, rent it, generate some cash and refinance to pay him back

Good though - thanks John. My issue is I make the majority of my money in commission and my lender said I need two years for it to be considered. I may qualify for this one but I don't really want to put 50k down anyways. I believe it needs to be move in ready for any low down payment scenarios like FHA. Maybe I can do a DSCR since it could pull in 3000 in rent?

I suppose I’ll just bring up how his neighbors duplex sold for 135k but I will come up to his asking price if he will hold the note. Or if he wants a lump sum I’ll need him to pay closing costs and come down to 175k or something. that makes down payment more manageable and I could get it back with a cash out refi. We’ll see

Hi All - hoping I can brain storm with some of you more experienced investors and creative financing connoisseurs.

I found a duplex outside of Philly. Really nice older, retired gentleman. Had a good conversation with him on the phone and learned he is looking to get $239,000 for his duplex. It’s an old house and needs work. I’m going to see it tomorrow so I don’t know rehab costs yet but I’m trying to be prepared to discuss potentially having him finance it for me.

The rental calc tells me I could at least break even while living in one of the units but I’m thinking I could improve the cash flow if I could get him to give me a low interest short loan with a balloon payment. I was thinking I could give him 20k cash and his asking price , which is high. A near by duplex sold for $135,000 and an investor is flipping it for a little under $400k.

My dad and I run an HVAC business and will serve as our own general contractors. I just want to find a way to acquire the property with a lower monthly payment so it can cash flow.

If anyone has any suggestions on how to structure a seller financed deal so that it might be attractive to the seller himself. I would love to hear your input!

@Sebastian Marroquin @Bill B.

Thanks for your replies. I didn’t realize the number the agent listed wasn't accepted by the bank already but that makes sense. I was under the impression my inspection contingency is waived, “as is”. I walked the property though with my dad whose a contractor and my realtor and we all agreed it was well worth the discount even if some larger issues were to surface later on.

I guess I’ll just see how it goes when my offer is submitted tomorrow. I will update once I get an answer. Thanks again

Hey BP - Newbie trying to execute my first deal here. I found a SFR outside of Philadelphia that is being sold as a short sale. The property is in rough shape but is listed at ~40% of its ARV. I lined up a hard money lender and ran my numbers and it looks like a promising deal.

Supposedly there was a ton of interest in the property so the listing agent informed my realtor that they would only be accepting cash offers. My hard money lender assured me that my loan would be as good as cash and he supplied me with a proof of funds to share with the listing agent. My main concern is now that I’m basically waiving any appraisal contingency but the hard money lender is still going to need to do an appraisal. I see the risk in this so I am trying to plan some exits before we submit the offer tomorrow.

In the event my offer is accepted and then the hard money lender either can’t get in for an appraisal or the appraisal comes in way lower I’ll be stuck in a cash offer where I dont exactly have all the funds. I’m assuming Im going to put a deposit down and I’ll lose it if I can’t come up with the cash when it’s due. I was thinking I could probably scratch the cash together from family but I also was wondering if I could essentially just wholesale the deal to get out clean.

Most importantly I want to know; Can I assign the contract to another buyer on an all cash short sale? Any and all other advice is welcome on the situation too. Thanks!

I wanted to bring this post alive again. I am planning on moving in august so I need to find a new job. I currently work for a construction/ estate management business so I could try to do something similar or I could change it up. Does anyone have any advice on getting a job at a home remodeling company? Maybe I could work a job that actually does exactly what I want to learn how to do on my own?