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.
------------------------------------------------------------------------------
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.
It sounds like you made a great deal! Awesome job. I hope I can make a deal like this soon.
This train, Dreams will not be thwarted
This train, Faith will be rewarded
Big wheel roll through fields where sunlight streams
Meet me in the Land Of Hope And Dreams
Bruce Springsteen
thanks for the inspiration...just joined today and cannot wait to reach my first deal...hope all goes well
Patrick
Very inspirational, way to jump in and get it done.
Jimmy
Congratulation on a great deal Sam, but what are the terms and the interest rate with the HML? I think these are some of the important info that our new investors wants to know. Once again, congratulation on your first deal and many more deals to come.
lloyd
good job bud!
- 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
Couldn't ask for a better ending for you. Big time CONGRATS....JAN
I am really happy for you. Looking forward to all the details and loan agreement. Good Luck.
Sandra
"You can never get to the top, if you are not willing to climb. Do not look at the difficulty of the climb, only anticipate the view from the top."
"Can't even walk without you holding my hand." (Song)
"Is anything too hard for the Lord ..." Genesis 19:14
"In all things, wait on the Lord."
"Think not of your own deliverance, but trust in God who will give in abundance."
"When you are down to nothing, God is up to something." Unknown
"Our lives begin to end, the day we become silent about those things that really matters." Dr. Martin Luther King Jr.
Sweet Deal and now you just keep the wheel turning!
"The greatest mistake you can make in life is to continually be afraid you will make one."
Elbert Hubbard
keep up the good work...
Don't Wish the Past, Create the Future! - DH
I just want to thank you ,after reading your post it gave me just the inspiraton I needed.I was getting ready to quit before I got started.I spent to much time analyzing everything,I think they call that "paralysis of analysis".I've got to tell you this is what really got me
from northwest post
Credit to CBRPOWER......"Most people don't realize how close they are to success when they quit. Had they just pushed for one more day, just one more day, they would have had success. Never quit!"
So once again thank you soooo much,and I hope I will be writing my post about my first deal real soon.
anthony palumbo
Nice job Sam!!!
It just goes to show you have to be in it,
to win it.Keep your eye on the prize.
Best of luck!!!
Don
Hey Sam, hats off to you and your willingness to take the risk thereby moving yourself forward. I'm older than you, and I too look to create financial security for older age, and for the children and causes I love. It was motivating to read about your experience. Thankyou!
Hi All, this does not reflect an entirely new transaction, but it is a first time for me so I thought I would share it--might be helpful to someone else.
I would not be thinking about this as easily (and nervously) as I am without having read Dean's book. When I moved to North Carolina from Idaho, I bought a townhome (squeeked in) when I arrived, figuring I would work at Duke, and knowing that I would not be long on a W-2 paycheck. As it turned out, I worked an hour and more away from my TH;did the commute for 1 yr 5 mos and just could not physically continue 2and 1/2 hrs/day. So I looked in the smaller town near Raleigh to rent or own. Owning was about $80 more per month than to rent modestly so I took the risk. The place is good quality, 2 story townhome, but a bit noisy for me. So I dreamed about living nearby in a development that costs more but has walking trails and peace that I crave. I decided I would lease to own my TH in the same small town in which I work (8 minute commute). I believe that the more I visualize, literally and as clearly as possible, visualize what I want, the more likely it is to occur. I ask for help; I throw my desire out to the univere. Now I know many of you are thinking "yeah yeah, cut the new age crap" but it works for me. I asked my neighbor if she was interested; yes, but iffy depending on her plans. I found myself thinking about a friendly woman I would often see crossing the street to work at the nursing home right there. I found a way to ask her and she was/is very interested. I had almost advertised with a local renting company, and I almost listed it on the MLS but was not willing to lose $5000 that way. So, it is working out with the woman already living in the TH complex who wants to own instead of rent. Her daughter is coming down with a young child, so mother and 2 daughters will be in the same complex--ideal for them, and great for me. I will earn 3k nonrefundable for my buyer's 1st right of refusal, and I will have positive cash flow of about $150 per month. W/W/W
Hope everything works out.
That sounds like an awesome deal. I haven't bought my first investment property but your story gets me very excited. Good Job
Warren
I am happy for you. It is still amazing to me that there are so many methods to being able to make money in this market. You chose to buy and keep this property and your getting paid to buy it. I cant wait till my couching starts. I am happy for you and everyone having success. for those of you not having success yet.. keep grindin and you'll get there.
Northwest, keep us posted on the the 2nd and 3rd deals too.
Oz
There's no place like home
Hey there.....After being tenacious and sending many emails I finally found a Hard Money source that seems to be viable here in the NW.
www.privatemoneysource.com is fairfield financials' website.
They very quickly approved my deal....they DON'T require an appraisal....only Good Comps, and a basic info about me...Including Credit report for the first deal.
I ended up needing to put a small down on the deal because we have never done business before. The lender told me that once we do a few deals together that they will not require ANY DOWN payment. They are going to put a lien against my current home in lieu of the down. That's ok because it's only until I refi in 3 months.
That basically puts some "skin in the game." I will only have to come up with $2000 as part of the Application process which will go toward closing costs. Also....I only have to allow 3 months interest payments as the minimum that they wish to recoup. The interest rate is HIGH...13%, but I only intend to pay that for 3 months. Also...they are charging 5 points.
I will begin the REFI process almost immediately. My payment should be around $1400 or so, not including tax and insurance, but the $1650 rent that I will receive will cover most of those costs.
I did the COMPS and the average cost per sq. foot for the last 4 months of sales is $132 per.
With the 2689 sq. ft that I am purchasing that ads up to a Value of $354K or so using that as a basis. I paid $160K for the property. Needless to say....even if the house comes in at $100 per sq. ft.....that's still $109K of EQUITY.
So I guess WHOO HOO is the right title for this thread. But I guess that
" OMG " would be more like it if it comes in as "average"value per sq. ft. Average = $194K in EQUITY.
Now I realize that I couldn't sell it at that price in THIS market, but I guess I could open one HECK of an Equity line of Credit.
The "PropTrend" software that the Academy sent me is a VERY helpful tool that allows me to look up the info on ANY property instantly to find out the owner's name and all the property details that are on file...Even Better is that once I look at a property I can click One button and it will put together accurate COMPS once I give the basic parameters. I have no need to call my agent to get official looking COMPS to present to the Lender. Anyway I like the software alot.
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.
You are truly an inspiration to us all. Wish you all success and WHOO HOO is the right title. Good luck and God Bless.
Sandra
"You can never get to the top, if you are not willing to climb. Do not look at the difficulty of the climb, only anticipate the view from the top."
"Can't even walk without you holding my hand." (Song)
"Is anything too hard for the Lord ..." Genesis 19:14
"In all things, wait on the Lord."
"Think not of your own deliverance, but trust in God who will give in abundance."
"When you are down to nothing, God is up to something." Unknown
"Our lives begin to end, the day we become silent about those things that really matters." Dr. Martin Luther King Jr.
GREAT JOB SAM WHAT AN INSPIRATION. I HOPE I CAN GET A DEAL LIKE THAT SOON. MY WIFE AND I JUST GOT ACCEPTED INTO THE ACADEMY AND RECIEVED OUR PROP TREND PACKET I CANT WAIT TO GET GOING...
BILL