All Forum Posts by: Mark Gallagher

I would look elsewhere for a deal. Don't get too caught up in a deal just because it's in front of you. If it doesn't work, don't force it. Politely tell her you're sorry but you can only offer her $50-$60K at this time. If that doesn't work, best of luck to you. 

I'm a numbers guy, but I don't like to over analyze. If you can put $10,000 out of pocket, on a $50,000-$100,000 property that makes $800-$1000 gross rents, $400-$500 net, you'll break even in ~1.5 years. Then in year 2 you have over half of your student loans being paid by someone else, all while paying off a mortgage on an asset. In 15-30 years, you have a property worth $100-$200K that you spent $10,000 out of pocket on. If you keep paying your $800 in student loans, and apply the profit from the rental, you'll essentially cut down your repayment length by 2/3rds. Or take the profit and save up for another purchase. This is all of course speculating that you can get mortgages, but it sounds like you'd be fine.

Invest now, not later. Your "financial consultant" either wants you to invest your money with him/her, or has no idea how to actually get out of debt! Passive income gets you out of debt. One stream of income is too slow to get ahead. You need other investment vehicles to get you ahead. 

Good luck!

So you're going to pay her $89+4 = $93K plus $7K repairs, $101K for a property that's worth $92K?

I don't follow how this is remotely a good deal. Maybe I'm missing something? 

I don't know how to properly serve them, I'm no attorney, but from what I can read I'd say you're wasting your time. It clearly says all expenses are to be paid by the buyer. If the buyer is going to have to pay items such as condo or HOA fees, back taxes, then why would water be anything different provided it's a municipal water company, not private.

The legal team at BoA > your legal team. 

Did you get a "deal" when you bought it? Even if you paid retail, it might be possible to list it for a few thousand higher and try break even. From what I know you're in a "hot" area. Just talked to someone who sold nearby and they had multiple offers within 2 days - on a retail-priced listing.

You can make money in real estate with little money. You just have to keep your eyes and ears open at all times. I purchased my first home with probably no more than $500 in the bank. And someone gave me a loan to buy the house AND fix it up. I got a check for $5000 at closing to start repairs. I probably used it to pay past due bills at the time! I ended up buying 3 houses with the equity in that property before I sold it.

I just recently did a deal where a woman was looking to sell her house that she inherited. It was full of garbage, but otherwise in old but decent condition. I knew the property was worth something. But she essentially said she wanted to give it away! She didn't want to pay someone to clean it out, she just wanted to be done with it. She told me she had just paid $5000 in back taxes so if I could just give her $5000 she'd sign it over. And she did just that. I paid her $5000 and paid all of her closing expenses. I obtained a clear title policy, cleaned the property out, and put it on the market for $44,900. I eventually dropped it to $30,000 and had multiple people interested, giving me offers in the low $20s. I said whomever gets me a signed deal for $25,000 first, takes it. And that's what I got, $25,000. Minus a commission to the buyer's agent, and closing costs, there was about $14,000 in profit! Well over double my initial investment, in just under 4 months. 

Moral of the story.. don't let the amount of cash on hand stop you. Read and study as much as you can, and keep your eyes and ears open at all times! 

How's the overall condo community? If it's strong and desirable I'd try to hold it. If it's so-so, something like this I'd offer $45K to seller, buyer pays the closing costs. They'll have comfort in knowing $45K is going in their pocket. I wouldn't offer say $60K and let the costs come out of that. I feel people wouldn't understand what amount they'll actually get. If they know they're getting $45K, they'll understand. Close, put it right on the market as-is for $90K, and hope to walk away with at least $20K in less than 45 days. 

Why is the seller selling? Doesn't seem very motivated to me. I'd line up some financing for your friends, and keep looking elsewhere.

The utility law here in PA states you can not turn the electricity off if you have anyone living there, including a squatter. You'll need to make sure to state the property is "vacant" rather than saying you have squatters. Learned that lesson first hand!

The concept you're thinking of can be done via wholesaling/assigning contracts. Look around here, and you'll find a wealth of knowledge on the subject. 

In a nutshell, if the house is worth $100,000 you put it under contract for $90,000 with the stipulation that you can assign the contract. Then you find someone to buy it for anything above $90,000, assign them the contract, and earn the margin spread.