All Forum Posts by: Rod Smith

You are right to be concerned about the purchaser only wanting to give you a deposit of $5k. I personally think you should ask for more. There is no way they should expect to get into a house that price with so little money out of pocket. Something may be fishy, which may be the reason they want you to owner finance in the first place.

Secondly, this is really a lease option anyway, so you are taking the risk of taking your house off the market for however long they decide to stay (even though you will be getting the $3k per month). What if they do not take care of the home? You have to consider what type of repair can be made with just $5k if things go wrong. The deposit is all the real protection you have.

I just found this post because I was doing some research on owner financing. After reading about the 2 deals represented here I think the deal I have on the table is horrible!

I have a seller that is willing to sell me a duplex in a lower income area for $50k with owner financing. Terms: $5000 dp (non-negotiable),7.5% interest rate, amoratized over 15 yrs.

I would do the deal if it wasn't for the fact that the property needs a little work. Low end, $2000, high end $5000.

To increase my cash flow I considered asking him to amoratize the loan over 30 yrs with a 15 yr balloon payment. I figure I can refinance by then, or pay off early using extra cash from other properties. This is really the only place I have room to work the deal because I already negotiated the asking price down $3k and the interest rate from 8% to 7.5%. Do any of you owner financing gurus have any suggestions?

@Jonholdman

@Billgulley

@JeanBolger makes a very good point. I am looking at a property right now with the owner willing to finance. The problem is, after the downpayment (required) and the needed repairs I will be pretty much broke, because I have another house I paid cash for and am waiting to do a cash out refi. Us little guys have to be careful not to get too far ahead of ourselves because it could end our investing career before it gets started good.

You definitely have to start sometwhere, just make sure you leave yourself some breathing room.

Excuse me, but for some reason my work computer won't acknowledge the @ reference.

Awesome....That is the exact price range I am looking in. I am finding houses that price in my target area and the values use to be there, but I get a little concerned because there are multiple foreclosures close by that continue to keep the comps down!

You did a great job @Account Closed ! Do you mind sharing numbers? I am trying to identify potential flips as I type, so I am always interested in a successful completion.

Thanks

Good evening all,

I am a small investor, but not a beginner because this is my second stint in the investment game. I have been a party to 7 buy, rehab and hold transactions and advised others on many more. I am also a licensed real estate agent. I know what to do, but my business is moving slow right now because I am using the method of buying distressed properties for cash, renovating and doing cash out re-fi which, as discussed in many post lately, requires that I wait 6 months for the refi. Well at least all of the lenders I know have that requirement. Then it takes a minimum another 2-3 months for me to find another property I want to move on, so I am basically buying 1 every 10 months. I want to move a little faster, especially while interest rates are low.

Anyway, that was just a little background. To increase my cash reserves I have decided I want to make my next couple projects flips and then I will get back into the buy and hold game. Here is my dilemna. As I look for properties in my target market, I see houses that appear to be attempts at flips and they are sitting on the market 6-9 months. This scares me! I like to give others the benefit of the doubt, so I want to think they did a good job on their rehab and even if the house is overpriced maybe they would have taken a lower offer by now so they could sell and move on. Maybe I am wrong..lol. I know some markets are hotter than others, but if you price a house right and rehab it properly in even a lukewarm market it seems like it should sell. It is not rural rural and the job market is stable, so people can afford moderately priced homes.

So my question is to the experienced flippers, what do you look at when researching a market? I know once you have bought and sold a couple properties in a specific area you kind of know the market and can even help set the values. But I am talking about when you first go into a neighborhood. As an agent my experience tells me that if I had accesss to the MLS in my target area I could make my life much easier because I could do a quick CMA on every property I am interested in. Then I could tell if the list price on a house is truly below market value, see what has recently sold and for how much, how long it takes houses to sell in that neighborhood, etc. However, when searching genericly I have not found the public sites to be reliable enough to depend on. Zillow is ok at best, but at times there are so many varying values stacked on top of each other in a given neighborhood, I begin to doubt the information. Based on what I just said I have reached out to the BP community for a referral to an investor friendly agent. Other than that, what methods have people used? Or is it that some areas just aren't good for flipping?

Your thoughts......

Thank you in advance for your assistance/advice.

Can anyone refer me to an experienced agent in the Augusta, Ga or Aiken, SC area that works with investors.

Contact Pat Mullins. She is an agent with RealtySouth. Her # is [REMOVED]

@David Harris 

Sorry to hear that things are not going well for you, however I have a question. You said you bought the property with a 203k loan. From my understanding HUD requires you use an advisor to help estimate repairs and draws are given as the work is performed. If this is the case, how is it that you have gone 4 yrs, run out of money, and still haven't completed the rehab of the property? How this happened really isn't clean......Did I miss something?

Try listsource.com. You can create a list using numerous parameters and absentee owners is one of them.