OfflineAs I sit here at almost Midnight ....I am contemplating my phone call to the success academy in the morning. Why? Because I just scheduled to meet a seller in the morning for brunch to sign my FIRST DEAL,and I don't know how to fill out my first PURCHASE AND SALES agreement.
Here is the email I received from the gentleman in response to my Craig's List ad.
"Hi Sam,
We just spoke briefly. I actually have 2 properties available, this is the most feasible one for an urgent transaction. Two story 1,652 sq ft. 5 BR 2 BA home with a very spacious living room & huge country-style kitchen. Gas furnace & water heater, fully carpeted (new in 3 BRs) except kitchen/baths. This property is on a 1/3 acre lot in a great location, great condition. (It can be partitioned into as many as 4 parcels.)
Also includes 2 car garage with workshop & storage room, which has above it a very cute 940 sq ft. 1 br unit. It had a recent total remodel, in excellent condition. We refer to it as an 'apartment' but would be called a house if it were on the ground - it's bigger than most 1 br houses.
Currently both units are occupied by very happy excellent tenants who get along well. We get $1650/mo. Marion Co. assessed RMV is 221,500. We have a recent clean P&D and full inspection report, and an independent pro appraisal from 11/07 @ 245,000.
I need to get as close to 160k as possible, but cash talks VERY loud and I'm an excellent listener. There is no distress, everything's current, we just need to relocate ASAP and aren't into being out-of-state landlords. Terms are possible also, with a significant (30%) down. "
After looking at the Email I called the man and I began to build a rapport with him. He lives near me on some acreage in a nearby town. He turned out to be an older gent that was wanting to move south to get away from the snowy winters. Their arthritis is the problem. Thus I found their Motivation.
In my AD on craigslist I flat out asked for Motivated sellers to call me. In ONE day I have had 2 people BEG me to buy their home. No looking for them......THEY CAME TO ME. A simple ad may have just earned me THOUSANDS of dollars.
The moment I finished speaking with him I told him I was VERY interested and that I would begin working on the private money to make it happen.
After speaking to a Hard money lender that my RE agent refered to me.....He told me that it all was sounding very good and that we might have an answer within 24 hours of looking at the property and getting it appraised.
The issue of a down payment came up and I mentioned that I would PREFER not to have any down. He told me that the lender would only cover 60%LTV without any "skin in the game."
The issue I had now was that the ACTUAL appraisal has NOT occured yet, thus we are just speculating on FMV at this time. He guessed that we should use the $230K
As a number for a moment.....the LTV at 60% of funding would be $138K as the MAX amount of the loan that would be available to me with that ratio.
My first thought was....."how do I get the guy to accept less money for this ALREADY great deal?" Then my schooling HIT ME.
Ask the seller to Carry PART of the loan payable in 12 months. I called him and HE AGREED. I will give him 120K at close and he will carry $40K for 12 months INTEREST and PAYMENT free.
I am meeting him in the morning .....pray that all goes well. The Reason I went with the 120K as a Loan amount instead of the 138K is that we don't REALLY know where the appraiser will come in.
BUT WAIT.....it gets better. The Hard Money guy says what they are doing right now is ROLLING the FIRST YEARS payments INTO the loan. Thus....ALL RENT PAYMENTS WILL BE CASH IN MY POCKET for the first year....$1650 a month currently.
So in the end.....HOUSE AND APT......NO MONEY DOWN....AND FREE YEARS RENT.
THANK YOU DEAN......I was watching TV at 1 in the morning one MONTH ago....I bought BARM.....it has been exactly ONE MONTH since the fire started to get started. I have been up until 2 and 3 in the morning since my focus has been REI.
If all of this actually goes as planned tomorrow.....there's no stopping this train.
WHOO HOO.....
BUILD your knowledge base....it is your ARSENAL to wage war against disbelief and the negativity of the status quo. You need your weapons......It's your choice whether you carry them or not.
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Build Relationships and open the door to opportunities that could once only be dreamed of......never take those relationships for granted.
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Don't let EXCUSES be the nails that keep you INSIDE the box.
way to go northwest, may we all bring them in like that!!!!
That's really cool to get a deal in one month.
Hard work paid off.
Well know it's 12:30am and I have to go use your post on Craiglist.
(Looking for motivated Sellers) Good one
Thanks
Jason S.
San Diego, CA.
**All CASH House Buyer!**
Refer Us To Neighbors, Friends & Family, Earn $1,000
LIKE my FB page http://www.facebook.com/JandBHouseSolutions
The title is " I WILL BUY YOUR HOUSE"
If you need to get out fast....we have the cash. If your home has decent equity left in it and you are negotiable to terms....WE CAN HELP. If you are in FORCLOSURE and stand to lose everything AND have your credit marked in a bad way.....WE CAN STOP IT. If you are MOTIVATED.....WE CAN MOVE FAST. Save your credit. You can start over again much quicker than if you let your home get forclosed on. We have many investors that can quickly purchase your home and PAY ALL YOUR BACK PAYMENTS. You walk away free and clear of any problems. We will take your home AS IS. No need to clean it up before the sale. NO need to wait for the Real Estate agent to list your property. No need to WAIT for a buyer. The Equity in your home is what allows an investor to purchase your property NOW.
Call Sam Martin
Northwest Investments
503-930-8651
BUILD your knowledge base....it is your ARSENAL to wage war against disbelief and the negativity of the status quo. You need your weapons......It's your choice whether you carry them or not.
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Build Relationships and open the door to opportunities that could once only be dreamed of......never take those relationships for granted.
--------------------------------------------------------------
Don't let EXCUSES be the nails that keep you INSIDE the box.
Hi Sam,
Firstly I want to give you a big congrats on such a big deal for your first one.........I am sure it will work out.
Being a newbie and just getting my feet wet, I am still amazed at what a homeowner is willing to discount a property for(approx 30% in this case) based on the estimated appraisal/FMV of $230K! Is this because the property was free and clear and he had no mortgage, or a very little mortgage with lots of equity?
I am just trying to go into the heads of homeowners that are so motivated that they would see these properties fully rented for such a discount! These are obviously the deals we are alllooking to find.
Kudos to you!
Neil
This seller has a motivation......they want to move because the WEATHER here in their "old age" is now beginning to affect them each winter......ALSO.....they don't want to be OUT OF STATE landlords.....so they are wanting to get rid of the Larger of their 2 rentals......They have owned this home for years, and so they have cash already, and they are happy to cash out EVEN at a discount because they originally bought the house for probably less than $50K
BUILD your knowledge base....it is your ARSENAL to wage war against disbelief and the negativity of the status quo. You need your weapons......It's your choice whether you carry them or not.
------------------------------------------------------------------------------
Build Relationships and open the door to opportunities that could once only be dreamed of......never take those relationships for granted.
--------------------------------------------------------------
Don't let EXCUSES be the nails that keep you INSIDE the box.
Now get some sleep........you have a big day tomorrow. Keep us informed and again great job!
Neil
It very well may happen that I walk with CASH at close as well as the monthly RENTS being cash for 1 year. Typically the Private Money lender will give you ALL of the LTV that they are allowing for you to finance. IE.....In my case.....the more the house is worth the more I will take home. If we can get a 220K appraisal.....60% loan is 132K.....I am paying the seller 120K and he is carrying 40K for 1 year until I refi. If it works out this way....I should walk around 12K in CASH and get my first month's rent ($1650) here in the next week or so. Oh the possiblities are looking good. 12k + $19,800 in rent is Equal to $31,800 CASH at close. It IS indeed as they all say....."if I can do it...anyone can"
BUILD your knowledge base....it is your ARSENAL to wage war against disbelief and the negativity of the status quo. You need your weapons......It's your choice whether you carry them or not.
------------------------------------------------------------------------------
Build Relationships and open the door to opportunities that could once only be dreamed of......never take those relationships for granted.
--------------------------------------------------------------
Don't let EXCUSES be the nails that keep you INSIDE the box.
Wow! This is wonderful, did you sleep at all?
I was going to ask you to post your ad and then I saw that you had already. Thanks.
OK I am confused about something, you wrote that you are doing this no money down and yet you are giving him $120K at the close - I am missing something here I am sure, can you explain it to me?
Thanks
Angela
Well done northwest. I may use the same here in the northeast. Good luck for the meeting and hope many more will come your way.
Cheerss!!!!
I have the same question. How are you giving him $120K at closing? Where is the money coming from?
"If you cannot do great things, do small things in a great way.”
Napoleon Hill quote
Grats. Sounds like a great deal.
Just remember that you do have that 40K loan out there that you will have to do something with...
Also, you will have to service the HML right?? What are the terms on that?? (That is where the purchase money is coming from.)
Again, congratulations.
If I read it correctly. I think he has a HML giving him the money with no payment for a while. SO no money out of his pocket.
Got it now. Rolling the first year's payments into the loan.
What are the terms on the loans after the 1st year??
Hey Northwest,
Congrats!! Thats awesome news! I am glad to hear that you thought of the seller carrying back the financing! I myself am all about that.
I have a few questions though. Did you say he would carry back the remaining 40k for only a year? and if so, what is the interst rate on that?
The reason I ask is if the seller needs the money up front and NOW, you can refer them to me. I sell notes, and even though your note will be unseasoned, I will be able to get them cash now instead of waiting the year. Or even if you were to finance it for 15 yrs at 10%, I can get them cash now so they don't have to wait. Just a thought, it would be added amo, in case they back out. Let me know, and check out my website for more info.
But great job! Thats awesome that you found a deal like that so fast! Good investing.
Kris
- The Copy Ninja
CEO
Cash Flow Financial Solutions, LLC
a subsidiary of Halo Enterprise Inc.
"Make a distinction between being interested and being committed. When you are interested in doing something, you do it only when it’s convenient. When you are committed you follow through – no matter what – no excuses. – Mike Krzyzewski , Duke Blue Devils
You've off to a great start. Again Congrats!!
Vic
Fake it 'til ya make it!
Hey angela.......I have NO out of pocket expenses.....the $120K comes from the Hard Money lender....he is paying my down IN that loan, AND the 1st years payments are IN that loan as well....therefore I get to KEEP the $1,650 rent payments for the next year. At that point I will already be refi'd and be paying the mortgage with the rent money.....Basically I have 12 months to refi the place, and I get cash until I do so.
BUILD your knowledge base....it is your ARSENAL to wage war against disbelief and the negativity of the status quo. You need your weapons......It's your choice whether you carry them or not.
------------------------------------------------------------------------------
Build Relationships and open the door to opportunities that could once only be dreamed of......never take those relationships for granted.
--------------------------------------------------------------
Don't let EXCUSES be the nails that keep you INSIDE the box.
I am biting my fingernails on this, but the Seller seems SO COMPLIANT....he's older, and is in NO hurry.....he just wanted to get this property out of his hair so that his option to move can come when HE wants, and not when the right buyer may have strolled along for a full price offer......anyway....more to come in the next few hours.....
BUILD your knowledge base....it is your ARSENAL to wage war against disbelief and the negativity of the status quo. You need your weapons......It's your choice whether you carry them or not.
------------------------------------------------------------------------------
Build Relationships and open the door to opportunities that could once only be dreamed of......never take those relationships for granted.
--------------------------------------------------------------
Don't let EXCUSES be the nails that keep you INSIDE the box.
Good luck you stike gold. Is your HML available in all the States?
Cheersss!!!
Vil.
Exciting!! Thanks for giving us the play-by-play!
Congratulations!
Rina
"Obstacles can slow you down, but they can only stop you with your permission." Dean Graziosi (BARM pg 101)
"For I know the plans I have for you," declares the Lord, "plans to prosper you and not to harm you, plans to give you hope and a future." Jeremiah 29:11
For a little about me, welcome to the site, and a few tips for new DG family members, click on this link: http://www.deangraziosi.com/user/3249
Hi Sam,
Congratulations on your success! My husband and I are also new to the investment business and we were wondering where you posted your ad on Craigs list? Was it in real estate, housing wanted etc. There are so many options so I just want to make sure our ad will be found quickly.
Best of luck,
Niki
We are all waiting to find out how it went!
Well?
I'm excited for you! I can't wait to be blessed with my first deal! Please let us know how it went!
Set a goal to achieve something that is so big, so exhilarating that it excites you and scares you at the same time. It must be a goal that is so appealing, so much in line with your spiritual core that you can't get it out of your mind. If you do not get chills when you set a goal, you're not setting big enough goals." (BO Sundberg)
Vicky Diaz
Hey there........I put that ad in the Housing Offered.....by OWNER........it ended up getting kicked, but I've since put it in the Housing wanted section.....I will alternate them. The more you get on there the more ADVERTISING that you will have for your "SERVICE".......helping people. Oh and making money hopefully.
BUILD your knowledge base....it is your ARSENAL to wage war against disbelief and the negativity of the status quo. You need your weapons......It's your choice whether you carry them or not.
------------------------------------------------------------------------------
Build Relationships and open the door to opportunities that could once only be dreamed of......never take those relationships for granted.
--------------------------------------------------------------
Don't let EXCUSES be the nails that keep you INSIDE the box.
I AM IN ESCROW.......
Although I am going to KEEP this rental.....I know NOW that I have at least made $19800 if I just assign this deal. This is the rent that will be collected over the next year.....IF I wanted to I could advertise this deal as $160K deal with 60K+ equity (at least...still need the appraisal) and that If you give me 20K I will walk away and buyer takes possession with NO PAYMENTS for 1 year. That's because If you use My hard money guy the first year is prepaid.
Once we get the appraisal I will know how much cash I may walk with....I hedged my bets and got the seller to carry back 40K to minimize the actual hard money loan. If the house and apt. combo appraise for more than 200K I will get some cash. My lender thinks that it may come in at around 230K. If it does.......minus closing costs I should clear the rest.
I am expecting to walk from the table with $20K - $40K
in hand, and IMMEDIATELY start collecting the $1650 a month rent which is CASH to me because the loan is prepaying the 1st YEAR of payments.
So in a nutshell we are looking at $20K-$60K in total cash AND 40K minimum equity.
NEED I SAY .......WHOOOOOO HOOOOOOOOOOOOOO...Thanks to all who contribute here.
BUILD your knowledge base....it is your ARSENAL to wage war against disbelief and the negativity of the status quo. You need your weapons......It's your choice whether you carry them or not.
------------------------------------------------------------------------------
Build Relationships and open the door to opportunities that could once only be dreamed of......never take those relationships for granted.
--------------------------------------------------------------
Don't let EXCUSES be the nails that keep you INSIDE the box.
Congrats and hats off to you man. Keep going!
"The entrepreneur always searches for change, responds to it, and exploits it as an opportunity." — Peter F. Drucker
Northwest,
Nice job on the deal. It's things like this that have made me want to do this. I just got the book and I am reading it now. I just can't wait to get started. Thanks for the inspiration and keep up the good work.
Thank all of you for the great comments........in all truthfullness the deal LANDED IN MY LAP.....but it was my advertising that made it happen. You have to make it known that you are willing to buy a property before it will ever actually happen. You will eventually have to get out of the books and off the forum to make this happen for you. Thankfully we can come back here and ask questions and make decisions based on other peoples' experience. Would you rather learn from your own mistakes, or the mistakes of others? No brainer. Anyway.......until this is closed it is still just a dream.....a dream with a good chance of occuring in the days to come. If I had not gotten out and did something........I would have NOTHING to write about. If I didn't decide to overcome my fear of rejection, and the negativity of my wife.....there would be nothing to talk about. I am standing up and saying ME.......I want to be on one of those videos.....I am not going to settle for less.......I am not going to wait for another deal to fall into my lap either. I am going to ACTIVELY seek it.....DAILY....HOURLY....Moment by Moment as I build what will be NOT ONLY my retirement....but my childrens retirement......I am 43.....GOD willing I have 30 more years to set My children up for the rest of their lives.......Real Estate can do that. THINK BIG.......I have lofty goals....I want to own 20 homes in the next 2-3 years. That's my goal.......if I fall short. That's ok. If I miss the mark and only have 15 homes.....what will my financial future look like? Set your goals HIGH. That way if you miss the mark.....you are still knocking it out of the park.
BUILD your knowledge base....it is your ARSENAL to wage war against disbelief and the negativity of the status quo. You need your weapons......It's your choice whether you carry them or not.
------------------------------------------------------------------------------
Build Relationships and open the door to opportunities that could once only be dreamed of......never take those relationships for granted.
--------------------------------------------------------------
Don't let EXCUSES be the nails that keep you INSIDE the box.
Hey northwest!!! The same with me, without this site and the helping hand from these great people who have been there, done that, and us newbies contributing here I would be just sitting down at home wacthing tv and watching my life slidding down to good for nothing. Anyway, you sound more like you doing well so far and wish you luck for the future.
Cheerss!!
Vil
Great job! You attracted that deal with your ad, but you MADE it happen with your skills and finding those magic buttons. WOW! It's so exciting to listen to you! Can't wait to hear the rest of the story.
Rina
"Obstacles can slow you down, but they can only stop you with your permission." Dean Graziosi (BARM pg 101)
"For I know the plans I have for you," declares the Lord, "plans to prosper you and not to harm you, plans to give you hope and a future." Jeremiah 29:11
For a little about me, welcome to the site, and a few tips for new DG family members, click on this link: http://www.deangraziosi.com/user/3249
hi sam
that's what i'm talking about...love the energy and power behind this deal!
it gives us one very loud message...THERE ARE NO LIMITATIONS!!! thanks for the reminder.
hats off to you!
here's to living the dream!
cynthia