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Just a quickie related to my previous post.

Are there any benefits to having a formal offer in writing, even if the seller verbally told the realtor our intended bid was unacceptable?

The realtor we're working with told us today hours before we went to sign our bid paperwork that she ran our bid by the seller verbally and he said no way. So, we didn't sign the paperwork.

But, I anticipate his mind will change due to many factors (available upon request)

So, would it benefit us to insist that our bid get put in writing anyways?

Haha!! I like your attitude! For some reason, this almost devastated me today. I actually said out loud at one point: "Oh well. Its back to the middle class life for me..." and felt my dream slipping away...

I guess you're right. Why did I feel so shot down over my first and only attempt not going perfectly on the first try?? Now I feel ridiculous. Hopeful... but ridiculous. LOL!

Anyone else? Where do I go from here... where do I look for "motivated sellers"?? Realtor.com in my area just seems bloated to me. I mean, bloated with overpriced homes and commission hungry realtors working for the sellers. Know what I mean?

I posted a thread in the Real Estate Deal Analysis forum, meaning to post it here. I just realized this a few minutes ago after waiting all day for responses. No wonder there weren't many responses, this forum is much busier.

I'll try to sum up my concerns/questions. Forgive me for the "newbie" tone, but alas... I am a newbie. ;)

My spouse and I want to get into real estate. We live frugally in a middle class neighborhood and have 3 kids. We recently paid off all credit card debt and would like to start investing. We are both in our 30's and fear the risk of beginning to invest at this age and stage (30's, kids, very little starting capitol) but feel compelled to "go for it" anyways. My spouse is very handy and resourceful, and we thought rental property would be a good start.

Today we tried to bid on a 62K rental property (2 fam) pulling in 875 in rent. Our bid was 52K with 3% seller concession, 5% down. This would give us $200 a month beyond the mortgage. The seller said NO WAY. We are disappointed, don't know where to go from here.

In this last week we've learned a lot already. Maybe we need to look at other options for starting out. We have only 2K in savings, and I took out $3500 on a low interest credit card (4.9%)

The money is just sitting in the bank. Now we are looking into HELOC possibly to fund our first house purchase.

We are afraid to involve the house we are living in (4 BR single family in middle class neighborhood) but at the same time, want to find the best way to break into real estate.

We are serious about this whole thing. Want to get started. Are we trying to bite off too much at once? Should we save longer? I'm afraid if we wait too long, we'll chicken out.

Any advice/words of encouragement?

Ryan, thank you for your reply.

Really, you didn't think our numbers sounded good? I mean, the cash flow, didn't sound good? How do you figure over 200 per month maintenance? What am I missing? Rent is 875, they pay their own utilities. Mortgage, we were shooting for 650, including PMI, insurance, taxes. I thought that a $200 profit monthly wasn't too bad of a return for just starting out. Teach me....

Well, I am replying to my own thread to post an update. I really hope I get some replies as I am beside myself over this, and I see after 50 something views today, I don't have any "advice" rolling in. I am sure my "newbie" language is probably quite annoying. Bear with me please.

We went to sign papers on our bid on the aforementioned house today. In a phone call this morning before we went to sign, my partner told the realtor our offer is "firm". She decided to call the seller before "bothering us" to sign papers to run our "firm" bid by him verbally. Then she called back and said he said NO WAY. Is only considering a 2 thousand reduction at best, won't even consider our bid AT ALL.

I don't understand. Did we make him mad with the word "firm"? We got greedy I guess, and used the word "firm" hoping for a very low counter bid. Well, it bit us in the backside, now we feel like we're "out of the game" with this particular rental.

My question is, what now? We would look like fools making a different official bid now, after all that "firm" stuff this morning. UGH. We really wanted this house.

We really want to get into real estate. Thought this house was our ticket into the whole thing.

Are we too old for this? I know people who get involved and start investing in their 20's seem to make it. I feel overwhelmed at the thought of it at our age (mid 30s) and stage (3 young children, not much starting capitol).

What are your opinions about this?

Hi everyone. I am a new poster in the forums. My spouse and I are about to get into owning rental property (signing our first offer today) and I am getting cold feet. Could someone check out our numbers/plan and tell me any thoughts?

Our rental we are trying to buy is a 2 family. On the market for $62, pulling in $875 in rent each month. We are bidding $52 with a 3% seller concession, 5% down on the home, 20 year mortgage, not sure about interest rate yet. (trying to lower it from the 8% we've been preapproved at) Mortgage will be apx. $650, giving us apx. a $200 profit each month. We called the town office and the seller paid $36 for it 8 years ago in a desperate estate deal (owner died unexpectadly, left wife with 18 properties she dumped in a hurry) The neighborhood is quaint, near a public school, decent.

In order to pad the bank account for our down payment/closing, I decided to borrow $3500 from a low interest credit card. We plan on using our profit to pay that off immediately with profit from rent + salary surplus each month.

We only had a small bit in savings but this house is "ripe" right now, and we really wanted it.

I'll also add here that we have 3 children and are living in our own 1 family home we are paying a mortgage on. We are both in our low-mid thirties. We have always wanted to try our hand at rentals/real estate, but have been too scared to take the chance. We are now "going for it" and actually have plans on another 2 family in the works later this year or next (buying from a family member). I'll also add that my spouse is very handy and the property is one block from us.

I guess my question is, is it ok to start out this way? Is it totally nuts, having to borrow from a credit card in order to "start out?" I know its not the ideal situation, but we don't know how else to get started. We could save for longer for the closing costs, but then this particular house won't be here. We don't know where this one property purchase will lead us, but we really want to invest our money in something to secure a better future (hopefully near future) for all of us. Do our numbers sound ok? (cash flow, loan numbers, etc)

Is this a smart idea?

Editing to add: We are sitting well financially. Bills are paid, food on table, plenty leftover each month. Thanks again - The Dame