OfflineHello everyone,
I closed my latest deal on 11/15 and I wanted to spell out the details. I am building a rental farm in Atlanta Ga compromising of single family homes in blue collar areas. The house that I closed on this month makes three in the area so far. My goal is to purchase ten of these homes, have them all rented, package them up and sell them to another investor.
The deal broke down like this. 3bd 1 ba 1100 sqft. Seller was asking 27k initially. Wanted to sell the home through an agent but thought better because all the agents that he interviewed told him that he would have to pay a minimum of 2k in commission. So I contacted him about the property and went through the questions that I ask sellers to gauge the motivation. At the end of the conversation I made him aware that I will send him an offer by the end of the business day, and I did.
I sent him two offers, one an all cash offer and one a seller finance offer. He accepted the seller finance offer and here is the breakdown of the numbers:
Initial asking-27k
ARV 37.5k
Purchase price-19k
Down payment-1k
Monthly payment 249.72
Seller will carry for 7yrs
I have a rental with identical specs that rent for 700.00 per month gross. And I already have two applications for the rental thus far, along with three other tire kickers.
So as exciting as that was, I get to go out into the market and look for that same deal all over again.
Jeremy K.
Hey there,
Congrats on the deal. I appreciate you sharing the details, the strategy and the process. Sounds like you have a simple process that you can consistently duplicate. Well done.
Don't Count the Days, Make the Days Count!!
Great work, Jeremy! Gotta like a man with a plan!
Karen
"You're never too old to be what you were meant to be!"
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"Shining Like a Star & Dancing on Sunshine"
"Shoot for the moon! Even if you fall short, you'll still land among the stars!"
I try to simplify things as much as possible. When I first started in real estate I over thought things, and I had to learn some tough lessons. I try to allow for multiple exits, in case one doesn't work.
Jeremy K.
I think when we are starting something new we DO over think things. You just showed how to simplify the process by knowing what you wnat to accomplish first then working backwards to get there. Keep us posted on your progress.
the details of the cash offer. I like the idea of giving the seller some choices.
Thanks for sharing the details!
Thanks, Nadine
** Realtor/Investor in Lancaster County, PA
His Hope Enterprises LLC
Creative real estate solutions --> www.GetMeOutFromUnder.com
Traditional real estate help --> www.LancasterHomeHelp.com
Congratulations on your deal, Just keep it rolling.
Jim Kendrick
http://kendrickpropertymanagement.com/
http://rochesterapartmentrentals.com/?page_id=10
Congratulations to you and your deal.
This is a great way to think creative with your offers.
And to have your vision with the next deal and so on.
Thanks for sharing!
To your continued success!!
Laura
BMW Investment Properties LLC
www.bmwinvestproperties.com
Sure I can share both offers. I sent the offers over just like this:
After performing some due diligence I can provide you with two offers, please let me know which one works best for you and we can proceed.
1. I can offer you all cash 13,800 and close in 18 days. You pay all the closing cost.
2. I can offer you a purchase price of 19,500 with 500 dollars down, amort for 30 yrs with an interest rate of 7%. Note payable in 7yrs.
He contacted me an hour after I sent him the email, and he said he liked option two better. However he wanted to charge me 9% instead of 7%, and he wanted 1,000.00 down instead of 500. I said that those terms were fair, and we proceeded. Remember in my due diligence I found out that he paid 18,200 cash three years ago. So of course it was more beneficial for him to receive more money over time. He stands to make a good income over time because of the interest he is charging me. And because it is a rental, they are making that payment for me every month, so we all when in the transaction.
Jeremy K.
I appreciate that, just trying to weed through and find the gems out here!
Jeremy K.
I appreciate that. Good Luck to you as well, looking forward to new deals that we all have, I always gain little nuggets that I can apply to my business.
Jeremy K.
Are all 3 of your homes seller finance? If not how are you funding them?
Cathyb
Cathy B
Follow my progress at:
http://www.deangraziosi.com/real-estate-forums/investing-journals/44397/...
The two latest properties are with seller finance. The first property I bought in the region was through countrywide, when financing was fast and loose
I am always raising capital as well, so if it is a situation where the seller absolutely opposed the seller finance offer, then I am in a position to perform with my all cash offer. But I discount the cash offer so low, that most people don't even bother to address it.
Jeremy K.
Woot that is awesome:) congratz on your deal:) I look forward to seeing so many more.
When you say thank you, you are telling the world that you want more. Say thank you every day! It will bring joy, and it will bring so much more.
www.virtue-investments.com
That's the way to do it! LOVEEEEE the seller financing! That is the next type of deal I'm looking to do!
I also do the same thing dealing with FSBOs Love the idea of submitting both at the same time as well! Way to go! Congrats!
A well planned investment. You did your homework and it is paying off for you. Outstanding job. Much success to your future deals...Jan
I like the idea of building a rental package deal to sell to another investor. Somebody'll appreciate you for that one. That person will probably be a keeper on your buyers list. Nice going.
This really is a win win for everyone...you save a lot of time by presenting it this was. When people are presented with choices they will pick one that best suits them. Will give you the details when it is done as the seller will also be a tenant and be able to live for free with a income to boot! Talk about a win win...
Barbara
I agree Barbara, I think that when all parties involved win, it makes you feel better about your deals. You build the reputation of being someone that is fair to work with, and someone that will perform. I think that right now it is so important to be able to do what you say you can, or if you can't get out in front of it and create solutions. This is the beauty of real estate investing, there are so many ways to build a strong foundation.
Jeremy K.
Every time I see someone post a new deal it fills my heart with joy, because I know we could do it. All we need to do is take action. Congrats Jeremy, you showed that real estate investing is feasible. All the best, now on to the next.
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.
I feel the same way. I love reading the successful post, it makes me feel good as well. The best part is how much you can learn from people who are doing it right now. That way, if you choose to duplicate things, you can.
Jeremy K.
Hi Jeremy,
Are you interested in more properties in Georgia? My partner and I are looking for a buyer for a home that we have access to in Georgia. PM me and I can give you the details as well as getting you in contact with my investor partner.
Also congrats on everything!
Together, we can be successful!