OfflineHi all,
I'm sort of new to all this. For the past year I've been reading a lot about Real Estate, cash-flow, and how to achieve wealth through RE. I'm halfway through Be a Real Estate Millionaire, so I don't have all the knowledge necessary, but here's what's going on and why I need your input:
This weekend I was at a well known lake here in New Hampshire with some family. I was sitting in the porch of our friend's house when I notice the house across the street has a "for sale" sign with a phone number. I ask our friends and they say the house has been empty for years, and only a year ago the owner put a sign on it. They rarely mow the lawn and it's just sitting there. I headed over there to peek through the windows. The house seems in pretty good shape. It's big and spacious! I was really curious because it didn't have a realtor's for sale sign, it was just a regular non-descriptive sign. So I said "oh what the heck", and dialed the number.
The gentleman who picked up the phone was really nice. He informed me a while ago him and his wife had to make the choice whether to move into their "lake house" or to stay on this one. At first I was a little confused because, though it doesn't have a direct view of the lake, this house has access to the lake for $90/year, where you have your semi-private beach and you can put your boat there too. This is what he told me of the house:
- 5 bedrooms
- 3 bathrooms
- 2 jacuzzis
- finished basement
- oil gas
- may need the carpet to be changed, but he doesn't want to put any money into it.
- the house was built under his direction 20 years ago
I asked him what the price was on it, and he said this: "Honestly, I'm going to leave that up to you. The house was assessed at $495,000, but I am willing to consider anything - within reason". He went on to explain the house is just sitting there, and though he wants to make some money, it is just sitting there and he has to pay taxes on it. He also mentioned that he didn't want to involve a Real Estate agent because he would have to pay them a commission (which I think it's crazy he would rather lose money every month/year, than to pay a commission for someone to sell it fast).
I told him I'd like to see some pictures of the inside. He said he could take some (which means that in a year, he hasn't had anyone with any interest enough to ask for pictures!). I told him if I was interested I would like to see the interior + get an inspection. He said it was all fine.
I looked in Trulia in the area to see what was sold. Most houses are 3-4 bedrooms, with 2-3 bathrooms. So it was hard to find a comp. The houses (even those on the lake) are going for a lot cheaper - Maybe ups of 390k, but I didn't see anything for 500k.
My fiancé and I are just starting out. We bought a duplex last year and we live in one side of it, while the other pays for most of the mortgage. I would LOVE LOVE to wholesale this deal or talk to a realtor who has someone who is looking for a big house on the lake. I think it can be rented through the summer season for some really good cash-flow. But I don't know how to go about it!
I don't know how to lock the property in. How to tell him that, though his house is beautiful and big, it's not worth 500k (I don't even know that for sure!). And I don't know how to find a buyer for it!!
I feel like I found this gem and I'm too early in my knowledge process. A little voice inside of me says "you don't know what you're doing, let it be", but my whole body says I must see this through, even if nothing happens... I should still try.
What should I do?!?!
Sorry for the long post. I'm really hoping someone can give me some light!
Sara
Never give up on something you can't stop thinking about.
Sara......
First and foremost we all are a little nervous at the begin but what calms this feeling is acquiring knowledge, then applying it and having support .
You are in the right hands here in the DG family.
My first step is continue reading be a real estate millionaire, then also read 30 days to real estate profits which is available on this website for free as a PDF
Then follow the action steps, it will guide you and since this owner does not want a realtor you have a great chance to accomplish your deal.
Lastly, numbers do not lie and makes your case sound not only reasonable but fair.
How long ago did you speak to the owner?
Watch your thoughts, for they become words.
Watch your words, for they become actions.
Watch your actions, for they become habits.
Watch your habits, for they become character.
Watch your character, for it becomes your destiny.
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Our Heart's Desire must be nurtured by our mind,to give birth to common sense, that will enable us to seek out the path less traveled, with the greatest Personal Growth. -J.R.-
Yesterday.
I'm e-mailing him today so he can send me some pictures of the house.
Never give up on something you can't stop thinking about.
Perfect so this has not been too far long ago .
By the way how did you run comps?
The way we are taught in 30 days is to follow these criteria's
Stay with in the number of bedrooms
Stay with in the number of bathrooms
Use the same type of home (if unsure when looking at the property google style of homes or ask the owner)
Use the same type of homes
Stay with in 20 percent of square footage.
Stay with in a 1/2 mile radius
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On a side note you are very fortunate the property is in close proximity to you because this can take off quickly if you follow Deans step in 30 days to Real estate cash *
Watch your thoughts, for they become words.
Watch your words, for they become actions.
Watch your actions, for they become habits.
Watch your habits, for they become character.
Watch your character, for it becomes your destiny.
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Our Heart's Desire must be nurtured by our mind,to give birth to common sense, that will enable us to seek out the path less traveled, with the greatest Personal Growth. -J.R.-
I searched in the area for homes that had been sold.
Most of them were lest bedrooms and bathrooms. So I will run the comps again.
I was using trulia. Is there a more accurate place to find comps at?
Never give up on something you can't stop thinking about.
I am printing the PDF version of 30 days to RE cash and devouring it today (so I can make mark ups and comments).
I will e-mail the seller today to ask for pictures, exact square footage, any documentation on the assessment of the house. While he gets that to me I will read 30Days and get the knowledge I need to process his information.
On another note: I re-ran the comps and found 2 houses that sold this year with the similar criteria.
One has 5 beds, 3 ½ baths, and approximately 3,662 square feet built in 2000. On a .47 lot. I don't know if it has access to the beach though. The list says The average price per square foot for homes for sale in that zip code is $146. and this house sold for $605k, even though it was appraised at $591k in 2013.
The second house has 3 ½ baths, and approximately 3,856 square feet. The property has a lot size of 0.32 acres and was built in 1890. I don't think this one has access to the beach at all. It was assessed in 2013 for $276k, and sold for $265k this year.
Never give up on something you can't stop thinking about.
That's awesome everything you need is in that book for clarification and
You can find buyers if you follow what is described in the book.
if you have anymore questions you can post it here, or create a post as you did here or you can pm (private message) me or any other DGer who may be of help to you.
Just stay focused and create a journal you will be amazed how helpful we are here and read some journal entries to give you a good idea of the examples put into action.
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In response to running Comps (comparable) the best way is a realtor however there are other ways such as the county clerks office of recently sold homes (and a good way to find buyers)
This again will make great sense once you read the book.
I will e-mail the seller today to ask for pictures, exact square footage, any documentation on the assessment of the house. While he gets that to me I will read 30Days and get the knowledge I need to process his information.
On another note: I re-ran the comps and found 2 houses that sold this year with the similar criteria.
One has 5 beds, 3 ½ baths, and approximately 3,662 square feet built in 2000. On a .47 lot. I don't know if it has access to the beach though. The list says The average price per square foot for homes for sale in that zip code is $146. and this house sold for $605k, even though it was appraised at $591k in 2013.
The second house has 3 ½ baths, and approximately 3,856 square feet. The property has a lot size of 0.32 acres and was built in 1890. I don't think this one has access to the beach at all. It was assessed in 2013 for $276k, and sold for $265k this year.
Watch your thoughts, for they become words.
Watch your words, for they become actions.
Watch your actions, for they become habits.
Watch your habits, for they become character.
Watch your character, for it becomes your destiny.
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Our Heart's Desire must be nurtured by our mind,to give birth to common sense, that will enable us to seek out the path less traveled, with the greatest Personal Growth. -J.R.-
Zillow is another website however the numbers may or may not be close to actual solds this is important because the closer the price to sold versus listed properties can vary greatly
Watch your thoughts, for they become words.
Watch your words, for they become actions.
Watch your actions, for they become habits.
Watch your habits, for they become character.
Watch your character, for it becomes your destiny.
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Our Heart's Desire must be nurtured by our mind,to give birth to common sense, that will enable us to seek out the path less traveled, with the greatest Personal Growth. -J.R.-
I started reading 30 days to real estate cash. Already wrote my whys and my goals.
I am getting married at the end of the month, so when we get back I will take each chapter and put it into practice.
If I can make 5-10k monthly with what I learn here I might be able to quit my job in a year or two. My job provides me with amazing discounts to flooring, carpeting and cabinets, so it might be good to stick around for when I do some flips!
I cannot wait to get started!
Never give up on something you can't stop thinking about.
your off to and amazing start with this deal, keep at it and work with this owner, this could be your great start and an awesome return for your time and success .
jbischoff
Haven't heard from the seller, but I'm not worried. I can always call again.
I just learned about the seller carrying the note. He said he built the house 20 years ago. If he doesn't have a mortgage, I will check my options with that. If I can clean it up and market it to sell, I might be able to do something with it!
Never give up on something you can't stop thinking about.
Sara - I would work on filling in the blanks.
1. Start with comps - maybe visit the two sold houses to see why one sold for $605k and the other at $265k. An accurate comp is your starting point.
2. Figure out the repairs.
3. Use the basic wholesale formula to figure out your maximum offer. Comp price x 70% - less repairs - less your profit = max offer.
4. Make the offer. The worst he can say is no.
5. Market it or close on it yourself. Do you have cash buyers looking for home in that area? Can you close on it yourself and flip it, or keep it for a rental?
Good luck and keep us posted!
- Tom
Hi Tom,
Great points.
I don't have cash buyers yet. I'm joining our local REI group so I can start meeting people!
Never give up on something you can't stop thinking about.