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Wheatie,

Let's say I sold it for $260K; where do I find the $15K to pay off the balance of the mortgage?

Generally speaking, the home prices in the area are declining while the "better" homes are flat. However, there is no real comp for this subdivision given the builder has not closed out yet, and the other homes in the area are older and a much different product.

I live ~30 miles from the house so I can stop by every now and then to see it. As far as costs go, the home is under a two-year warranty so one number fixes everything that would go wrong. The HOA takes care of the lawn. I won't have to repair or replace anything for the next two years in this home.

With 9 homes left, maybe two or three of my model, I'm not too concerned with the tactics the builder may entail to get rid of those homes. Most of them face the back of a strip mall or have rearview neighbors, basically the least appealing lots. Four of them are the furnished model homes. And once the builder sells out, there's is only way to buy into the community...there is some opportunity for me to sell at $295K.

I have a home in a new Ocoee, Florida subdivision that I purchased for $275K in June when the builder's list price for the home was $298K. The builder has about 9 units left and the price for my model dropped to $280K. However, I have one of units with a lot premium because of the view. The model I have is the largest, lots of upgrades, and a similar one is listed on the MLS for $360K and my neighbor next door is asking $380K for his. A smaller model in the subdivision is also on the MLS listed at $340K.

My mortgage on the house is $1900 PITI; and will go up to at least $2300 when taxes are reassessed in the next few months. Mortgage is 100% financed at 6.875%, 5-year interest only. Rents in the area are $1000 - $1300. I've had about four months of vacancy, as the tenants who left only paid for 1/2 a month and the deposit $500 (August) and never paid for September. My payments are current.

I'm aware of how bad a situation I'm in, I'm looking for some ideas on how to get out of this situation with my credit intact.

Focus:
What are some lease option structures that I can consider?
Should I list for $295K on the MLS?
Any other options available to me?

Thanks,

I'm in the Metro Orlando area (Osceola, Seminole, Orange, Brevard, Volusia counties) and I was told the best strategy for me (excellent credit, no home, about $5K in cash) was to trade-up given the market here in Central Florida. With about 26K homes in inventory, this person says it will be extremely difficult to sell a rehab unless I was dealing in the luxury home market where sales have continued to be strong.

I'm interested in hearing another opinion on the best strategy for a market like this.

Thanks,

I'm two months into REI and thought I my strategy would be quick flips, rehabs and wholesales. I've never owned a house, have excellent credit (740+), and earn a decent income. At a recent new member orientation at my local REI club I bumped into a broker who shares their commission from a purchase with the buyer they represent. The broker convinces me that given my situation (no RE assets, <$10K cash available) that I employ a trading up strategy as it was one of only three strategies that makes sense in the current Central Florida market. He argued that if I'm able to get a good enough deal a builder will cover all closing costs; I'd have equity within a month or two; I'd get cash at closing because he'd give me a cut of his commission; I'd get certain tax benefits; and of course, pride of ownership.

I'm now under contract for a home at $275K, the list price was $298K, and the same model sold last year in the subdivision for about $345K (April 2006). The most popular model sold out at $150/SF (it also had the lowest list price at $252K, a year ago it was $307K), my home came in at $141/SF. We were able to negotiate our number based on the fact the builder was attempting to close-out on the community. The builder is covering the closing costs, the builder will apply money left over from the closing costs to buy down points on the mortgage, and I'm getting around $3.3K at closing from my broker. I tried to run Zillow and Trulia searches to see what other homes had sold for in the community; however, the place isn't even mapped yet (Google, MapQuest, Trulia, etc. all show vacant land where my home is).

The strategy is that I live in the home for two years and use a HELOC for future investment property. I would then rent this house for the last three years, preferably putting the tenant into a lease option or purchase agreement, and as long as I own the home I'm doing an interest-only 5/1 loan.

Focus: Does this make sense strategically? Economically? I'm looking for a second opinion. I will be closing at the end of the month.

I work full-time and my boss is a slave driver, I am afraid I won't be able to step away to take calls. Is it a good idea to hire an answering service? What is the best way to train them to take my calls?

Thanks

Are there any good techniques to make sure that those who respond to my newspaper ads are truly motivated sellers? What should the ad say? What should my VM message be to screen those who call?

Thanks.

I'm finding the rehabs easier because it's much easier to get a list of wholesale properties from the countless other investors in the area. They've done the legwork and are looking to make money from the assignment.

But, I just read an earlier post and it seems this falls into the 80/20 rule. I'm doing time-intensive activities (driving around neighborhoods) instead of using MLS searches and fax. I will also put some ads in the paper and see what turns up.

I got into REI in March and I've finally gotten to the point where I feel I can do transactions. Originally, I felt doing wholesales was the way to start out, but as I circle neighborhoods, talk to investors, sort through the homes I get from being on buyers lists -- it's much easier to find and do rehab.

I know and trust two project management services who charge a flat fee to manage rehabs and getting myself a rehab won't require 100+ calls, $2500+ in direct mail, circling neighborhoods and countless bandit signs. Am I missing something in my thinking here? I may have to partner for some of the cash, but I feel I can do a rehab right away instead of 3 months of expenses looking for a wholesale deal.

My question: am I not searching for wholesale properties correctly, or should I just go ahead and do a rehab?

Thanks,
Vernon.

On Monday I want to start contacting realty agents, brokers, mortgage brokers, loan officers, and title insurance companies to let them know I'm an investors and would like any distressed property referrals they may have. What are some great incentives that work with these group of professionals?

I know after I call them, they may just forget. So should I send a handwritten (or typed) note or a fax to follow-up? Is e-mail just as effective?

Thanks,

RE-Driven.

I cannot stress enough how much you can save by buying REI books and "No Money Down" kits off of eBay from someone who never used them. Many of the books and kits are practically new.