Am I missing anything?

Go for it. You will make some good money.

I say make the offer. Without offers, you won't make any deals happen.

Your situation is a little unique since you will be living in it, so I have a few questions:

1. How long will you have to live in it?
2. How long will you want owner financing?
3. What are you going to do with the property when you move out? (Wholesale, rental, lease option, flip, etc.)

I see where you are giving us numbers as to what they are ASKING for the property, but people can ask anything they want. Have you done comps? What is the ARV?

Why did everyone else back out?

Did you have inspections done yourself? Or did the sellers tell you they came back ok?

What about other repairs? How much will they be? How much will the septic upgrade be?

By owner financing, I am assuming you are meaning you will take over their loan? What are the terms of the loan? Is it fixed or adjustable?

You have not really given us much info at all for us to know if you have crossed all your Ts.

Karen

Never a good idea to skip an inspection even if someone else has done one. One inspector my find somthing that someone else has missed or overlooked. I also agree with Karen need more information on your deal.

With owner financing, what are your plans for the prop? Fix and Flip, Buy and Hold??? What is the ARV after repairs are done? It seems that you have some of your cards in place, but what are your plans...Jan

Use Leadsheet, get ALL needed info to make an 'educated offer', NOT some, oh well 50% off offer.

May be good for L/O or owner finance- whats the payoff of mortgage?

GOT to run the numbers

Inspections are a Must

thank you for your input! I appreciate it!

Good Questions! I will live in it Maybe 1 year...maybe 4 years. Not sure. Will depend on my success with other properties.
2. Will want owner financing for a year if I can get it (as long as I can negotiate) and will rent out a room or two if I need to until I find something else for which I may want to live in and repeat the process or until I can afford it on my own. I am divorcing and it's tough with kids in tow but I'm not lowering my standard of living so I have to elevate my income!
3. When I move out I will rent it out or lease option but I prefer the rental because lease options while they are great usually end up being short term because people usually want to do a cash out so I would prefer to keep the cash flow.

Thanks for replying!

Hi Karen:

Good questions also.
First, everyone backed out because the price is way too high! The last person backed out because it turned out that the house was too small for them. I already am quite familiar with this particular township. It could well be that there is a sewage plan in the works requiring everyone to "tap in" or something along those lines. I will get that information when I meet with their agent later today.

The inspections I did not have done but I know this property and this neighborhood. I have spoken with all the neighbors who knew the owners. Their agent told me they came back okay. The property sold but fell through at the last minute. That doesn't scare me. The median home price in the area is roughly 550000 and it is one of the most desirable areas to live. The schools rank in the top 10 of the state and the crime rate is nearly non existent. Remember, I am going to live in this house. It is not simply about numbers for me.

The area I'm looking at is being bought up by two investor groups who are killing my chances of getting a property. I need to strike fast on this one. The After repair value is roughly 350-400K. The septic upgrade will probably run about 30K but I have friends so that will work out and it isn't immediately necessary. It was merely recommended and the potential buyers were using it to negotiate with.

Thanks for bringing up the questions about the terms of their loans. I wasn't planning on offering to "take over their loan" but rather have them simply continue to hold the note and collect from me while I seek funding and septic estimates. I will promise to refi by years end and hope they go for it. I'm making an offer only. They haven't agreed to anything yet and those are my terms as I'm offering. I can only hope they are (I hate to think of people as despreate) but eager enough to go for it! Why would they? Because it solves their problem right away and they can take it back and resell if it doesn't work out for me in a year (which of course it will because I'll rent it out before I let that happen)

My focus here is to "own" the property to get the leverage! Then the game changes!

Is there something else I left out? Thank you for all the thinking you made me do. Putting all that down is helpful!

So, my takeaway from you Karen is
1. What are the terms they are working with in their mortgage?
2. What is going on with the septic...need more details.

Thanks!!!

Christa, I agree normally! Absolutly! I am fairly certain on this one though that it's a great buy and the potential is there!

Hi Jan! Please see my reply to Karen above. My plans are to hold and live in it while I transition my life for 4 more years. That could change but that's the plan currently. I need to find funding after I "own" the collateral!

Once that is done...everything changes but my investment career has to be secondary to my actual living so I'm seeking one that actually incorporates both.

I have been looking for two years! The cards are in line finally and there are many cards I have been holding, believe me! I think I answered your questions. Why? What are your thinking?

Sounds like to me that you are making this decision based on emotions and not on facts. Saying that it is "not simply about the numbers" says that right there. It is ALWAYS about the numbers if you are doing a RE deal!

All of your answers are vague and generalizations. "median home price in the neighborhood is roughly" "I have spoken with all the neighbors who knew the owners" People don't always tell the neighbors what is wrong with their house. "THEIR agent told me" THEIR agent only gets paid when he sells the house. "The After repair value is roughly 350-400K". That is a $50,000 span! HUGE!

If this house has been on the market long enough that it has dropped from $380 to $350 to $335 those "investor groups that are buying up the area" are not interested. Why?

Sorry Sheil, I don't think you really want our opinions. I think you have made up your mind. I think you were just hoping we would justify your decision.

My opinion is that at this point, you aren't looking at this as an investor but as a rookie being guided by emotions. I hope this doesn't come back to bite you.

Karen

Investing is ONLY about the numbers.

If I were to start over investing with my current knowledge, I would chose one of two paths depending on my financial position.

1. If I didn't have money, I would wholesale until I had enough capital to buy rentals.
2. If I had money, I would buy as many rentals as I could before the market goes back up. Then once it went high enough, I would start buying rehabs.

But that's just me.

You might be better off lowering your standard of living for a few months or maybe even a year, and then using any capital you have to invest with. You have to make sacrifices if you want this badly enough.

Like I said before, without offers, you won't have any deals. It's that simple.

We're not trying to be negative towards you, or crush your dreams. That is the last thing any of us want you to think. We're just being realistic with you. We all want you to keep posting on this site, ask questions, help others, etc. We want to see you post about your first deal! Don't let this one deal ruin the motivation to continue onto the next!

I highly admire your motivation and determination. If you put that effort into investing, you'll go very far my friend!

always use your lowest number for ARV and your highest number for repairs; are there any other repairs needed? How are you going to pay for all those expenses? do you have some capital saved up? If not, have you considered doing a lease option to a tenant buyer instead of you moving into the property? By the way, L/O's are not short term.
As much as you would like to move into a nice home with your kids, I think that you should build up some capital first; otherwise, instead of creating 'leverage' you may end up losing money with this one... what if you can't rent a room or two? Can you afford the payment on your own? also, what will happen in a year if you're unable to get financing, and the owner takes the property back?
Don't let your emotions take over when you're doing rei; I know it's hard, especially when you have kids; but as everyone points out here, you need to fall in love with the numbers, not the property.

wishing you good luck,

Thanks everyone. After my meeting today I've decided that this house would be a lock down, house poor decision with no kicker. So back to the drawing board. I was trying to make a simple fast move on a retail property that I thought might turn out to be a wholesale purchase due to seller circumstances. If that were the case and I were going to rent it out entirely, it would be great but they are holding out for their retail price. That's fine...the market in this area for retail will allow it. But I don't want to buy retail.
Don't worry about offending me. This is not my first rodeo so they say and I have purchased, sold, leased, rented and subdivided properties over the past 20 years but not on the level I am trying to get to now. My limitations make this different in that I am trying to stay in the same school for my daughter. It's a small district and I'm very limited in my choices and this was the best one. Without all the details you can't know so my question wasn't fair I suppose in retrospect so I totally understand your positions and I agree with all of you. Thank you all so much for offering to help. I will continue to use the site for sure. I'm a busy mom, inventor, hairstylist, volunteer and real estate hunter and it's nuts!

Now, does anyone ever buy trailer parks? I know of one (but I would have to investigate much more so don't shoot me just yet). If the information I have is correct, it has 50 lots on 14 acres? From what I know it has a positive cash flow and isn't entirely rented out. If anyone wants to work on this together, let me know. Thanks again for everything!

Wow, look what you learned on this one... and you might want to revisit it after it sits for a while longer.

And your right this site is full of great advice.

Okay, while I was contemplating this purchase, I started to seek renters and got quite a response to my ads.

I now have a group of people who are seeking properties to rent and I need to find properties. I'm not having luck with REAs though. Maybe it's just me but I don't seem to be able to relate to them. They call themselves "buyers agents" but I always feel like I'm trying to convince them to work with me on my plan. They want to know if I've been pre approved, blah, blah blah which agitates me because I'm only wanting them to help me with the property search and presenting the offer and not the money and they of course want to only do work when they know there's a big score so struggling with that. I'm sure I'm approaching them wrong so I'm working on that. Insert diplomacy!

I spent some time this morning replying to my new potential tenants offering to help them find something else since my other property was "already claimed" and I'll see what reply I get. This has inspired me to get back to what I'm great at and that is finding empty bank owned properties or pre foreclosures. If I had a list of investors in my team we'd all be making money so I need to get that done.

I would love to make my strategy a buy and hold strategy but perhaps I need to simply grow my investor list to assign to for now. Maybe a little of both.

My goal: Get a deal by March 1st... and start my journal here on DG

Bagganation,

Check out my guide for beginners on some tips to get a good Realtor. The link is in my signature below.

When you are calling these professionals, you are in NO way qualifying yourself. Instead, you should be interviewing them. Take control of the conversation. Don't let them walk over you.

How exactly are you approaching them? Maybe we can help you fine tune your approach.

moment when the very adorable, younger than your son sweetheart named Dominic turns the light on! I can hear the angels singing! Aaaaahhhhhh!

I cannot tell you how much weight just lifted...

I must have been on autopilot or something during that chapter when I read Deans books!

Thank you!!! xo

Great guide btw...very nicely written and you're right....you were getting robbed at 46G.

Hi, Sheil~
Just thinking...Have you considered a duplex or small multiplex acquisition?
This would allow you to live in one unit while renting out the other(s).
You could possibly arrange to manage (oversee) the property, as well.
Could be a great long term investment. Dean had done this in his early years...

:jawdrop Absolutely brilliant idea! And I love it! If I could find that it would be such a perfect solution to my complicated list of needs! Especially if I find one where I can transplant my home based salon. That way I could continue my beauty biz and grow my RE bus in my down time!

Thanks Kat... It seems that is your forte. Any advice?

I'm going to visit your profile and see what you're RE biz is all about as well.

Note to self! I need an inspirational catch phrase or quote!

Hi, Sheila~
Some of the duplexes here are turnkey (already rehabbed to retail market level)...Perhaps you could find one where seller is open to Owner Financing or a Lease Option. Even one that needs improvements where you could negotiate that into the equation and transaction could have possibilities (with a small crew of your own over time). Review the process here on DG.com threads & in Dean's books.

Have your Realtor search for area duplexes for you.
Be sure to run your numbers, check market rents, due diligence, compare to other like properties, etc.
~Hoping this works out in your favor!

PS. Multifamily units go by "doors"---some sellers are only offering "half" duplexes, so be aware of that. You'll want a whole duplex, tri-plex, or 4-plex to make it work out.

Awesome to hear the guide helped!!! Start a journal to keep track of your progress, that way you can always look back to see where you were, and how far you've come. It's a great way to inspire and motivate yourself.

Keep it up!