All Forum Posts by: Garrick Solberg

I'm a little confused how you purchased it for 150k, financed 200k and only ended up with 26k at closing. Are you saying the 24k of the remaining 50k is going towards repairs?

Also, your expense report is a little off. Maintenance and repairs will be more like %10 of gross rents in the long run, and you forgot to include property management, which is generally 10-15% of gross rents. 4% vacancy is rather optimistic as well, I would factor in at least 8%. Here's a revised monthly report:

Monthly NOI = 2600

Monthly Expenses:

Taxes:292
Ins:142
Vacancy: 208
Maintenance: 260
Management: 260

Monthly NOE = 1162

Remainder = 1438
Debt Service = 1700

Net Operating Loss = -262

And even this expense sheet is rather optimistic. I didn't include any owner paid utilities, advertising, eviction costs, etc. MikeOH would estimate the expenses to add up to $1300 in the long run, making a -400 operating loss per month.

I'm actually going to be looking at some properties this afternoon that a seller is offering owner financing on. His asking price is retail (175k) with a 30k down payment. Obviously the retail and big down payment parts are extremely unattractive, but I'm hoping that negotiate him down on price, and make up for the rest in terms.
I think the chance of successfully reaching a profitable arrangement is very low, but it's worth it for me to get experience in negotiating and considering terms.

Before I jump into this, I would like to know how the heck do you write a note? Do you tell a lawyer the basic terms and they write up the agreement?
The particular property I am interested in is a duplex in a nice part of town. I am considering moving into one half and renting the other. Because of this, I would be able to get conventional, homeowner financing if I wanted to. The first time buyer rate is something around or a little below 6% at the moment, so I would need to get a better rate then that from seller. Would this be a realistic expectation?

EDIT: Sorry for the threadjack :(

A monthly income of $1300 with a $35,000 basis? A calculated monthly GRM purchase price around 27!? Are you kidding me? I'll take as many as they can give me! Jump onto that deal if you can verify the numbers. The best GRM's I have come across in Jacksonville so far are 80+ and I'm still looking hard for the opportunity to find something around 50 or less.

Well, I might be moving back to Minneapolis in the coming year, so I'll be sure to look you up if I do. How are things in the city right now post-bridge collapse?

It's funny because I have been posting an ad on Craig's list looking for a realtor that specializes in investment property. I have yet to get one response, lol.

He identifies himself as the property manager.

His PITI is $1721 with an additional $12 HOA fee. As far as getting somebody in an RTO situation, I suppose it's possible, but I'm not sure how much higher a month people are willing to pay for that. 3/2's generally top out at 1300 in this part of town. The HOA doesn't allow for multi-tenant rentals, so its a bit of a miracle that he has a single tenant for $1400, really. Losing $300 a month isnt bad if you only have to stand that for a month or two until sale, but it's definitely not a long term strategy.

A little picture painting here: It's an out of state investor that purchased the property through foreclosure in the late 90's. The subdivision is in a suburb of generally nice homes in the 230-450 range. His purchase price back then was around 130k or so. He had it listed for awhile at 240k and the listing eventually expired. Through realquest I was able to find out that he refinanced the property in April, and the transaction records say 202k, not 211k which he says is currently owed. There is apparently only that one mortgage.

Yeah, it's definitely not good for a rental. I had hoped, since I would not be putting any money down, that flipping might be an option here (assuming renter would be willing to vacate, which seller was pretty sure he would).

But you're right, as lease optioning wouldn't really work because no one would be willing to rent for that much. Retail is possible, but then I would probably lose out after all the comissions, closing costs, and concessions are paid out.

Hey all,

I have my first potential deal if I can get it setup "subject to". Here are the details:

First mortgage is currently at 211k
house appraised for 270k, but really comps to 240k
Has a renter in the house right now for 1400/month (ouch!)

The owner is considering selling the property subject to, or the loan is assumable as well. Does the spread seem large enough? I know that the house was listed at 240k and didnt sell, so we know it cant get that. Maybe listing it at 225k would get the home sold quickly.

The seller is asking me to send him an explanation of how the subject to process would work (as in the steps to be taken). I'm not entirely sure myself, since I have not set one up before. Also, the seller is long distance, so he wouldn't be here for a closing. Does anyone know of a good resource that gives a good step by step outline of the subject to process?

Thanks much!

Garrick Solberg

Exactly, and once I learn the SECRET, the thousands of dollars I will have spent on Ron's education will seem insignificant to the millions I am earning. Riiiiiiiiiiiiight.......

Anyways, happylogan, I didn't get your PM, but you definitely made the right choice in not going. Find any possible house leads?