We just bought 106 Units for $2500 Out of Pocket!! Then they gave us $50K cash back at closing!!

***new note 11/11/11 We made the paper today for deal #2! Check out the link in our 11/11/11 post!***

The Tale of 2 Closings----

Closing #1: 46 units, combination of apartments, townhomes, & Duplexes. $500 Earnest Money. PP $1.25 million. Seller carries back $250,000 down payment plus an extra $50K (we got back in form of bank check at closing). Bank finances remainder at 5.75%. Closing costs offset by tax credit. We also got security deposit check of $14K. This was a great landlord, no deferred maintenance, turnkey properties. Cash Flow $5K/month immediately. Easy to raise rents- landlord hadn't ever raised rents more than $10-20. Cashflow potential $8K/month.

Closing #2: 60 Unit Apartment Complex, $2000 Earnest Money. PP $1.25 million. Seller in major financial distress on all properties, pre-foreclosure, GREAT neighborhood, LOT of deferred maintenance. Found an equity partner with farmland equity and used that to finance down payment. They will receive 5% gross rents as long as we own it. No money OOP for them either. Bank financed the remainder AND gave us $900K Operating line for rehab and operating expenses!!! AND we received a low interest rate of 5% since we used farmland for down payment. We live in a farming community. This property is in distress and we have a general contractor already lined up to start rehab next week. We are at 50% occupancy due to the need for rehab. The county commissioner board is also giving us a 2 yr. tax moratorium (NO property taxes- saves us $72K) on our rehab complex and we are negotiating a rate freeze for a minimum of 5 years. This is an eye sore in the best neighborhood in town. Everyone wants it rehabbed and the mayor is on our side too. The bank is also allowing us to pay quarterly interest ONLY payments until rehab is finished. After rehab, we will cash flow around $10K/month. We also have a potential deal with a local college for student housing, which would be a guaranteed cash flow of around $35K/month.

Both properties are in GREAT neighborhoods. We won't buy if it's not. Closing #1 properties were never on the market. We networked through landlord association and initially thought we would try to wholesale this property. Then we became focused on purchasing it ourselves when we realized seller would finance down payment. Closing #2 was much more complicated and we have actually been working on this one for exactly one year with the distressed seller. She received an offer from a big landlord in town that owns the adjacent property. HOWEVER< THIS IS IMPORTANT------FIND OUT WHAT SELLER NEEDS!!!!!! We related to her and cared about her situation. Through our long conversations with her, she revealed a note she had with her parents for $50K that was important to her to get paid off. So, guess what we offer, how about we assume that note? That was all it took. Our offer and that of other potential buyer was very close. This tipped the scales in our favor. That was a hard contract to get signed and took a few weeks. We were also diligently working with the foreclosing bank throughout the process. They wanted it in new hands and we were focused, professional, and had a plan. We spent several weeks preparing a very detailed business plan for both of these properties. The bank was impressed. We have good credit but not a lot of equity or income. We really had to prove ourselves in this whole process. We celebrated when we got each loan approved through the bank's board. We have learned a TON throughout this process that we would love to share. There is so much more but too much to write on here. We encourage questions, and would love to help others through our experience.

We plan to hold these properties long-term and have great cash flow properties to pass onto our children. There were many bumps in the road, and we are not going to lie, we could have given up SEVERAL times. It was not easy at all, but we were diligent and focused on getting them done. All of the credit must go to the LORD. He was faithful in the entire process. We asked for wisdom and guidance and to protect us if any part of it was not in our best interest. This past week has been kind of a blur. We spent most of Tuesday and Wednesday in the bank, attorney's offices, and title company offices. Crazy week but AWESOME results!