All Forum Posts by: Ryan Russell

A warm Arkansas welcome to Ray Ellen.

I thought I'd share an interesting deal I quickly put together a few months ago. I am a regular at my local courthouse sales. I value most all properties scheduled for auction prior to the sale and come up with an amount I'd pay for each property.

Anyway, I was high bidder (only bidder) on a home that was in a neighborhood I was very familiar with. Picked it up for $112,000 and ARV was around $150,000-$160,000. It was an unexpected purchase as the former owner owned about 1/3 more than the $112k I purchased it for.

I'm also a RE broker and I list a lot of REO homes. I have an extensive list of investors that are looking for a good rentals. As a matter of fact I had just sold 2 very comparable REO listings in a comparable neighborhood to an investment group the month prior for $135,000 each.

So, I called this group (2 attorneys) and we met at the property that same afternoon. The terms of the courthouse sale were that I had to fund the entire $112,000 within 24 hours. I offered the property to them at $130,000 (which was well below market value) with the contingency that they had to fund the purchase within 24 hours.

They agreed and I had the foreclosure attorney who conducted the sale prepare the deed in this groups name (rather than my companies name) and they funded it the next day for $112,000. The deed was mailed to my office and I traded them the deed for the difference ($18,000 profit). I was also able to offer them a title commitment as I have a team in place to regularly make these type of courthouse purchases.

I am pretty proud of how this deal went down. I had no expectation of even purchasing a property that day as none of the homes auctioning looked to have any equity. This was my first true wholesale as I typically buy and flip.

I just wanted to share the success story. Thanks for reading.

@Curt Smith Thank you for your feedback. It was very helpful. I'm still working to put together this specific deal.

@Cal C.

Sorry Cal, I ran across your response and guess it was lost in the shuffle when you posted back in March. I hope your deal in NWA is going/gone well. The market has gotten much better this year. I don't feel that it died last fall. I've seen a steady increase in market conditions beginning in mid 2012. A lot of it depends on location, type of RE, etc... I'm happy to provide my opinion on a specific deal if desired.

Joe Gore I'm going to pay an attorney to run this mortgage through correctly for me. I'm not familiar enough with Dodd Frank to do this first one without help. I an to use this deal to learn more about it though. Thanks for your insight.

If there are any wholesalers working the NW Arkansas markets (that I don't already know) please keep me in mind when you find a deal. I have the ability to pay cash and close quickly. I'm interested in any type of deal located in Benton or Washington Counties (Fayetteville, Springdale, Rogers, Bentonville and surrounding areas).

Joe Gore yes it should appraise around $100,000 give or take $3,000. Since I'm going to owner finance it shouldn't be an issue though. The only appraisal will be from my lender and I'm only financing $65,000.

Thanks Tim Cooper. I agree on risk of buyer damaging home. Nothing I'm not used to with my SF rental holdings though. The key on this deal for me is the large down payment which mitigates that risk. I've already talked with my bank (it'll be an in house deal) and they are fine with the structure. We purchased it at a courthouse sale.

I'd love to get some feedback on the deal I'm currently trying to put together. I recently purchased a property for $70,000. I immediately listed it for sale at $99,900. I received an offer 5 days after I purchased it from a buyer requesting I owner finance it. He has a $25,000 down payment. I countered their offer with the below terms which should net after all costs to close about $94,000. ----"$99,900 purchase price ----$25,000 down payment from buyer ----$1,000 buyer closing costs paid ----seller Financed mortgage of $75,000 at 7% interest on a 10 or 15 year am (whichever buyer would prefer). ----Buyer would pay for insurance (with me as co-insured), pay for annual taxes, and make any repairs or complete any maintenance as needed. Basically we would treat this as if it was a traditional financed deal." I have a 50/50 partner. Our net on this deal would be approximately $23,500 total or $11,750 each. Partner has no interest in the owner carry but is happy to make 50% of net on an extremely quick turn. We paid cash when purchased. Podcast #70 was awesome and provided me the push I needed to try an owner finance deal. So, I would take my $11,750 profit and keep approx $5,000. I'd then take $5,000 and use to pay down $70,000 initial purchase and finance $65,000 at 4.5% interest, using the same amortization as buyer selected. The remaining $1,750 used for closing costs on my loan. It should net me about a $175 monthly residual. I'd close both mortgages on the same day. My banker and buyer are both aware of each other's mortgages. Am I missing anything here? Would you keep entire $10,000 and finance $70,000 instead? Again, I'd love to get some feedback as I don't want to do anything out of line. Thanks in advance.

Where at in Arkansas is it?