I pinged the owner of this house again today and hope to hear back soon.
Over the last two months, I had some pretty intensive training, inspections, and other military requirements to meet and had to put things on hold.
Just this past week though, I've put one house under a lease option and another under contract for purchase.
The lease option one: Lady missed 3 months of payments because her lawyer advised her to so that the mortgage company would "work with her" on her payments. She owes 55k. Her mortgage payments (not including taxes and insurance) are $395/month. I've signed a lease with her for 36 months with two options to extend it another 12 months, twice. So potentially 60 months total.
My payments to her mortgage company are $395/month. On the 1st of April and 1st of August, I will have additional payments of $495 to her to cover taxes. She will cover insurance throughout.
I've paid $100 for the option to buy the house at $55k anytime over the next 3-5 years.
I brought in a partner/mentor who brought a buyer who we are going to sell it to for $65k, plus any rehab he wants us to do. Currently, we're only laying carpet, putting in some tile, and replacing the windows. Oh yes, and tearing down the garage. Those costs will be added to the $65k purchase price.
We are leasing to him for $800/month and charging him 10% of the final purchase price (looking to be 73k) for the option to buy. His lease is only 18 months long.
Although we would make more money if the option is not exercised, my wife and I are hoping he can get his financing in order sooner so we can get out of the property and realize our profit.
The rehab one: A gentleman contacted us through one of my wife's marketing strategies. He had a rental where the tenants had been cited multiple times by the city for various violations. He was in the process of evicting them when they set fire to the place. Fortunately, the Fire Department got there soon enough to save the house. We'll have to gut it and re-wire it, but the structure seems good. I'm going to have it inspected just to make sure, but I've already had a couple of contractors in there who were positive, but wary.
I told the owner that since I couldn't put a multi-family on the property, that I was only willing to pay $5,000 cash and could close in a week. I would also cover the closing costs. He wanted 10k, but agreed to 5k.
The garage in the back has a mechanic's pit and use to be a big workshop. We're thinking about walling off the one stall with the pit (on the end of the garage). The rest of the garage and the shop area will be converted to a kitchen, dining, living great room. There is already a good sized room with a sink (WATER!!). We'll need to run sewer though. The garage is metered (electrically) separate from the house. There is another room on the garage that was a show room. That'll be the master bedroom. I'm pretty excited about this idea.
The house is boarded up mostly and we're going to take our time fixing it up, learning as we go. I've learned quite a bit over the last week and a half and quite a bit of it has been experience.
I worked a third deal before both of these, but that one was more of a referral to my partner/mentor who can handle the financials of this deal. I'll just get a finder's fee for that, but hey, it's better than nothing and I'm still growing!!
I've a fourth deal I'm trying to work this weekend, but I'll post that in a separate thread.