All Forum Posts by: Mike Downing

Extreme creativity needed in purchase of property.... 1960 single family purchase price of est. $550,000, instant value of $675,000.... ARV of $850,000 after cosmetic only $40,000 rehab. Would rent for $4,000 which would cover mortgage. But this is where the creativity comes in. The house is 60 yrs old and original but in fantastic shape. And what I am proposing to the lady that lives there who is 88 and has zero cash. Is that I buy the house but rent it back to her at a great deal and let her stay there as long as she likes. The property has an extreme appreciation upside, and rising rent upside. One of the best school zones in Texas, very rich area.

She probably pays no more than $1,500 in monthly taxes and insurance.  So I have thought that it could be fair to charge up to $2,500 in rent, and just take a loss of $1,500 monthly. 

She owns the house out right, so I have been trying to think of some sort of owner financing that is a win win. I have access to $250,000.  I was thinking I could offer her a higher price for the home but do a zero interest rate, principal payment only(maybe like $2,000 principal monthly), with $150,000 down.  

So far we have kind of just discussed that she would like to have cash, and I have made the suggestion of me buying the house. She showed interest but is skeptical.  So I am trying to put my best foot forward first deal wise.  What is a good realistic win win that would be attractive to her.  I get the feeling I might have one shot at this.  

Investment Info:

Single-family residence buy & hold investment in Houston.

Purchase price: $635,000
Cash invested: $135,000

Sweetheart deal that I found on Craigslist that is located in one of most premier locations in Houston,Tx. Home was waaaaay out of my league financially, but I ended up pulling it off in the end. While rehabbing this house I started thinking of myself as an actual investor. Started listening to the bigger pockets podcast and realized I had been using the brrr method minus refinance without even knowing it. I honestly at the time thought it was foolish to pull cash out, but that is the way.

What made you interested in investing in this type of deal?

Great deal, with tons of upside.

How did you find this deal and how did you negotiate it?

Craigslist... over the course of 4 months I went back and forth with the owner until he eventually came down to my price.

How did you finance this deal?

30 yr conv

How did you add value to the deal?

House was unlivable... 40k rehab to get rent ready

What was the outcome?

rented before the work was even done for 26 months

Lessons learned? Challenges?

Deals can come from anywhere

Investment Info:

Single-family residence fix & flip investment in Houston.

Purchase price: $145,000
Cash invested: $88,000
Sale price: $350,000

Was planning on this being a semi-permanent family home... but of course a deal that was too good to pass up came along, and so we sold it in a hurry to purchase another single family. Needed the cash quick and had never given any thought to a refinance or HELOC. Super stressful for the family, but got the cash I needed to move forward and buy what I consider to be a unicorn deal off Craigslist.

What made you interested in investing in this type of deal?

It started off as a family home

How did you find this deal and how did you negotiate it?

An old family friend was selling properties and this fell into my lap... just a no brainer great deal.

How did you finance this deal?

30 yr conventional with a home style renovation loan

How did you add value to the deal?

Fully gutted and rebuilt the home

What was the outcome?

Got a great deal of cash from the home

Lessons learned? Challenges?

Very difficult dealing with a bank to get cash to renovate a home. Lots of red tape, but ultimately made me stronger with my organization, planning and creativity.

Investment Info:

Single-family residence buy & hold investment in Houston.

Purchase price: $163,500
Cash invested: $30,000

Bought it for $163,500, worth around $300,000 today and cash flows $700 monthly. First investment property. Owned for 6 yrs. Currently owe $140,000. I take all the cash flow and put it towards the principal.

What made you interested in investing in this type of deal?

Started off as a Primary home, then became a good cash flowing rental with positive equity.

How did you find this deal and how did you negotiate it?

FSBO in front yard... driving the neighborhood, saw the sign, walked into the garage where the owner was. Asked the price, it was clearly a deal and signed a contract on the spot.

How did you finance this deal?

FHA 30 yr

How did you add value to the deal?

Added 30k General Contracting myself to make the house go from not nice to nice.

What was the outcome?

Great, I feel like I am going to own this forever... until I am ready to cash out.

Lessons learned? Challenges?

Contracting can be hard... construction can be hard. Being prepared is key.