Deal #9, I call my 'lots of contracts' DEAL. $12K for 8 hours... Added pics :) CLOSED TODAY!

Deal #9, I call my 'lots of contracts' DEAL. $12K for 8 hours... Added pics :) CLOSED TODAY!

Hi DG family. I wanted to share my latest deal that's in progress; should be closed by the first week in August. I was not allowed to assign this deal, so it makes for a lot of paperwork as I'm simply doing a quick flip on it, but I have to cover my ASSets. Laughing out loud

(Yeah, me, you know, I love to take on new adventures and try different things out. Smiling )

I'm buying this property in IN for $26,000 (26,775 out the door after closing fees and such). The property needs about $10-15K in work. I'm immediately selling it to the end buyer, but with a twist.

My self directed IRA is purchasing the property. I'm in the process of having the appraisal completed, but the ARV is approximately $85K.

As for repairs, there is no functioning bathroom in the house. All the fixtures have been removed; sinks and commodes gone; everything gone from shower, water heater's gone, but they left the kitchen and cabinets in tact and the house is in good shape otherwise. And, all the plumbing and electrical is run. So, repairs are about $10K.

My end buyer is going to be living in the property and he is a general contractor. Laughing out loud He will pay $1500 upfront and repair the property getting proper permits and such, and then $1000 a month for 40 months; at which time I will deed the property over to him.

In the end, what I'm doing is seller financing it to the end buyer; in a way that IN law will allow, but I'm still talking with several people about IN laws and will most likely end up doing a lease option on the other side, but calculate it out with the amount of principal going towards the option each month. My main concern with doing the l/o is the insurance, as usually an out of state owner will pay much more in insurance, so I want to work out a way for the tenant buyer to carry the insurance in his name, but I escrow the payments into the monthly payment and I'm on the insurance as a loss payee. (Not sure how I'm going to do that yet!)

I'm selling it to the end buyer at $31K as is, but will make another 8K in seller financing, so my total profit in this deal will be almost $12K for a couple hours of busy paperwork and lots of phone calling. Smiling Not too shabby!

And, worst case, if the buyer should walk away after all is said and done, provisions in the contract make it so he has to surrender it in good condition with all repairs, and I'd pay him $700 to move for leaving the property in tact without removing any items.

Oh, and in the meantime, while I'm trying to refinance my deal # 5 property, I have $1000 more per month in income coming in. I'm GOING to get that house refinanced because of this deal! Smiling

It is CERTAIN I will SUCCEED!

Edited to add pics Smiling

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TAMMY

Congrats!!! I enjoy these types of deals because u r ALWAYS learning something from them....they r NOT traditional deals but ......a TWIST ........is right.so cool to CREATE THESE out of THIN AIR!!! Way to go.......neat.the best part I like is the interest....YOU ARE THE BANK...when u do multiple deals with u as the bank.......just CRAZY the interest u can accumulate...not to mention the other profits!!!!!! Yessssssssir
Jay

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Yeah Jay

KaChing!!! Laughing out loud


self directed IRA

I see you're using self directed IRA. Can you provide some details on how you mange buying and selling through IRA? I have an interst in doing the same but know their are certain rules you msut follow. Thanks and continued success

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ankeris


Deals can be bought

with your self directed IRA, either wholly or in a % basis. In this deal, my IRA is purchasing 92% of it, and I'm the other 8% of it. (Due to the amount of the sale being just slightly higher than what I have in my self directed IRA.

Choosing your company is one of the most important aspects in getting a self directed IRA as some companies limit the amount of things you can do. (Equity Trust Company and Guidant are 2 companies that are very open to doing RE deals, notes and is very good for what us REI do Smiling )

You can go to my website in my signature with learning about private money, and I have a whole section on that site about using self directed IRAs and what to look for in a company. Smiling


Nice work Tammy!

Love your thinking here. Good profit. Way to go Tammy.

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Blessings & Favor,
Gena.
Follow my Blog: www.genahoriatis.com

I can do all things through Christ who strengthens me. Phil 4:13

Psalm 1:1-3


Thanks Gena!

This one just literally fell into my lap. Laughing out loud

God is good! Smiling


You are doing some great things

I am looking forward to doing my own deals like yours-without the retirement fund. Since I don't have one...But Though I am new I am very motivated. You are an inspiration to me.

__________________

Dream High-Strive for the Stars-Let no one steal your Dreams

StacyKae


Wow!

I'm impressed since I'm still a newbie trying to learn all these terms and just different ways of going about this business. Congrats on this deal Smiling

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When you trust in yourself, you are trusting in the wisdom that created you.


StacyKae and Nathalie

We all start out the same way. Even with prior experience it took a lot for me to get out there and try all these new techniques, but once you do your first deal, its addicting! Best advice is to get out and take action! Even if you don't know it all yet, you learn the most as you're doing it. This whole deal is a new experience for me as well. Smiling

It is CERTAIN we will SUCCEED!


Got word I will be closing

on 8/2. Now, I hope I get all my paperwork done. I had to take a break from it as it was getting overwhelming. Smiling Well worth it! Sticking out tongue


hey

Been a while since I spoke to you.. been pre occupied with my mom and the JOB market.. great seeing you are doing well and I hope you continued success. Keep me in mind if you ever want to do something in the future.. I need the help.. lol my last venture, lease option turned out to be a nightmare.. so.. I wait and see what happens next.. keep in touch Tammy.. Kevin


KEVIN!

Its so nice to see you back around here! Its those nightmares we learn most from! I will definitely keep in touch! Things will get better, just keep on trying! Did you hear Chad Merrihew's story? His first venture lost him over $100K! So, don't feel bad, the nightmare outcomes are only experiences, that we learn A LOT from! Got to brush them off and get back up again, only much wiser! Hope to talk soon!


A C T I O N...

I really look forward to hearing the details of this deal. You are movin' and groovin' ... so the IRA holds the property for the 40 months with all tax advantages....is there a penalty at withdrawal when hand over deed to end buyer in 40 months? Probably not enough to matter. Keep those deals flowing!! Thx for sharing the process. You are awesome!!

__________________

Jill Holden | San Diego
Investor Services
Team Development


Hi Jill

No, no tax penalty, because the proceeds are in my IRA. Now, the 8% I own personally, can be taxed. Laughing out loud But, yes, I am very excited about this deal. Its nice to go out of state where properties don't cost in the 200Ks!!!!!! And, to have the end buyer in place rarin' and ready to go, SAAWWWEEETTTT! Taking action is where its at!

So, immediately, I have put $24.6K out of my IRA (and 8% of my own money, which is really my END BUYER'S money Smiling) for purchase, but then once it closes, I'll have $31K+ closing costs IN my IRA... instantly increased my net worth in a week by 5K... Then, over the next 3 years, I will have payments of $1K per month going into the IRA using a land contract or Lease Option. Then, I will deed over the property to the new owner at that point. My IRA will then have a cash balance of $39K, after removing the value of the asset after deeding the property over. In the meantime, I'm getting $1K cashflow tax free ($80/month will be taxed. Smiling ) Loving it!!! Thanks DEAN and SA!


Nice One!

Tammy,

I love hearing about your deals that are definitely thinking outside the box! Just awesome!
Thank you for sharing with such great details! we all are certainly learning from you!

Wishing you more great deals,

Valerie

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Valerie

“And will you succeed? Yes indeed, yes indeed! Ninety-eight and three-quarters percent guaranteed!” ― Dr. Seuss

"I believe in angels, the kind that heaven sends; I am surrounded by angels, but I call them friends" - Unknown

My journal: http://www.deangraziosi.com/real-estate-forums/investing-journals/59110/...


Thanks Valerie!

I love that people can learn from sharing deals that I'm in the process of learning from Smiling.

I look to Dean and I think that's a major reason for his success; he openly shares his knowledge and wants to 'create more millionaires than anyone else'. I think he's well on his way to achieving that goal!


This property

happened to be one of 3 parcels owned by the same parcel; and foreclosed on. The bank doesn't sell the lots, so I'm going to see if they'll deed the 2 lots over to me with the purchase of the property. The property is on a small pond, and the tenant buyer wants to be able to put a fence around the whole pond because he has children. The same bank has the two parcels. Pursuing now. Laughing out loud


I'm adding some pictures to the thread. :)

And an interesting dilemma arises during the deal! There is NEVER a dull moment in REI! Laughing out loud LOL The ex owner of the property was trying to get into the property to take everything out of the house and strip it. He had already gotten a couple of nice chandeliers the day I wired over the majority of the money and secured the contract. So, the sheriff was out, and its burden of proof on the current owner that he doesn't own it. So, my end buyer is going down to the courthouse to get the proof that that owner is indeed no longer the owner.

My concern is this guy will break in as we put on another new deadbolt today. Oh, the joys of buying REOs!


Ok,

the bank is including one of the other parcels with the purchase; I'm working on getting the other one as well. That will equate to over 3 acres with the house. Smiling I'm in the wrong state, here 3 lots would be equivalent to 1/3 acre, if you're lucky! Sticking out tongue

Got the title report back today as well; there are 3 judgements against the old owner showing on title; when they did the foreclosure, they didn't take them off at the time of the foreclosure so they remained on the title even though the ex owner with the judgements against him no longer owns the property. All 3 will be taken care of before I close escrow to assure clear title by contacting the attorneys and having them do a partial release, keeping the judgement against the person, but removing the liens from the property. Whew.. lots of learning with this deal!


My buyer

would have paid a lot more for this house. He's willing to pay all the judgements on the title if we can't clear them. I told him that we are going to GET them removed; there is no sense in paying for another person's lawsuits. 1 of the 3 judgements we've already gotten removed! Laughing out loud ANYTHING IS POSSIBLE!


WOW!

Congratulations & great job! Please keep me in your prayers so that I will soon have similar testimonies!

Sincerely,

Alvin


Loving learning with you on this one

My family is new to the DG family, but I have to tell you I am learning tons from you on this one! I can't wait to see what happens next! I am also getting excited learning how to approach doing my first deal. I got the books and have dug in like digging a trench for a water pipe Smiling


Got my

Lease Purchase agreement all written up. The buyer's are not comfortable doing a Lease Option because they did that before and lost $16K because the seller backed out. They weren't very informed, but my goal is for them to BUY the property; this is NOT one I want to hold onto because of the fishing pond in the back. The 3rd parcel of land is owned by the brother of the guy who foreclosed on the 2 lots I'm acquiring; he is willing to sell it to me as he has no need for it, which will give the property full ownership of the pond and just under 3 acres. I'm hoping to get that parcel for under $2K, and sell to my Buyer for $3K. Smiling

This is a crazy deal as its a bulk REO seller and they do not have the dee yet, and it could take 180 days to get the deed in my name; yet I'm selling it before I have the deed so I had to incorporate a lot of crazy language into my contract. It's quite a piece! Closing tomorrow; Lease Purchase closing the next day. Smiling Too busy to breathe! Sticking out tongue But worth it.

The property will need to be financed for 4 years; so if they do not refi, I will have $9800, but I advised them to REFI once the property is habitable as they will pay less a month.

Onto the next deal; where I decided to offer $45K more than I wanted to pay, and ask for $45K from the seller. Sticking out tongue (It an REO). Waiting anxiously to hear back on that one!


Oh,

and I ended up taking about 16 hours to do the paperwork! Sticking out tongue


My deal closed today

Just waiting on final notarization from my self directed IRA for the B to C portion of the deal. Smiling But the A to B (me buying from the seller) is closed and final. Cool The B to C (my end buyer, doing a Lease Purchase with me financing him) will close tomorrow. Laughing out loud

I love REI! Smiling Final close price for the final buyer is $33,775K due to adding the external fees beyond my control. Smiling


Tammy,

Nice job!! On to the next!!!

Ryan


Tammy

Way to go, that was a really interesting deal. By the way did you get the other parcel from the former owners brother?

__________________

Cathy B

Follow my progress at:
http://www.deangraziosi.com/real-estate-forums/investing-journals/44397/...


Thanks Ryan and Cathy!

We are still working with the brother to buy the land from him. The old owner managed to get in before we closed and maliciously cut all the existing electric wires and steal some more lights and panels.But, my buyer is ok with it because he's a general contractor and its no big deal to him.

The brother is not close to the brother who did all this destruction. This property has always been owned by their family, and when the parents died, they willed it to the brothers; who divided the property due to issues they had.

Now, this is the part you will love! Smiling My self directed IRA and I, as the 8% owner, are going to hire a company to manage the property. Guess which company? Laughing out loud Mine. 10% of the 'rents' will be paid to Zion Properties for managing the property; and it will count as an expense to the IRA, but I will be getting paid $100 a month out of my IRA; so of the $920/month my IRA is getting, $92 will go into my business without tax penalty...; of the $80 I'm getting, $8 will go into my business. Thought you'd like to hear about that little twist. Sticking out tongue


Tammy

Great job!! Your whole process is a bit over-whelming to understand but very excitable. That was a very interesting deal you've made. I'm still a newbie but I am hoping I am a few steps closer to finding my first deal. Your process for this REO gave me food for thought. Can't wait to hear more.

On the path
Anissa


TAMMY

Great job on this one I hope it all works out the way it should go. I am so happy for you Tammy. Keep up the good work.

I hope to see you soon at the meeting with Dean.

Steve.


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