OfflineIt's official, #2 is in the bag. I paid cash for this baby myself; after taxes came out I had to come up with $37,000. It needs very little work, and I could flip or rent very fast. But, it's a cute little thing that should bring in $900 or so for rent.
So I spent all my money and have been looking for banks to refinance with cash out. My first deal I took a loan out for $36,000. I was talking to my accountant who is partners with a financial services company. The owner of this company told me how he finds private money lenders who want to borrow money to people like me. I have heard many times through the Rock Bottom Blue Print about finding hard money lenders. But I still didn't understand the terms, etc. He told me he could find an investor that would loan me the money, for say, one year. Because after a year my original loan will be seasoned and I can refinance and pay back the private money lender.
I'm sure this isn't new to many, but for those who were in the dark like I was, this is really exciting news! The rate might be a little higher, but to get cash back to buy another one... Yee Haw!
Closed today on Deal #2
Posted on: Tue, 11/08/2011 - 03:48
Closed today on Deal #2
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- by cantstopme
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Way to go Gina!! Congrats on your two deals. Can you please share some more details about your two deals, like how you found the properties, what's the ARV etc,. Two deals in just few months, sounds exciting. Keep going!!
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We gotta know the whole story! Do you have #3 in your sights yet?
Sheila
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Money Talks. That's the gist of it. Congrats and all the best. God Bless.
Sandra
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Deal #1 was on the mls since March. The bank owned it and I put it on my "watch" list. It was listed at $59K then $49K; and looked like it was a mess. I wasn't sure if I wanted to put that much money into fixing my first deal. In the mean time, I was looking at other properties with my real estate agent. We looked at another REO that I thought was listed at $59,000, but that day the bank that owned it had dropped it to $49,000. I put an offer in at $33,800; it needed flooring, a ceiling in the bathroom, part of a wall was ripped out, and some love. I figured they would come back with their best offer and maybe I would buy it. Nope. They rejected the offer, no counter. So I moved on.
I went on the Total View site to get an idea of the ARV. Both of these properties had an ARV of $100K and $133K. I decided to make an offer on the Deal #1 at $41K or $42K. The bank came back with $45K. I was going to be financing it through a local bank. My realtor advised an inspection contingency, in case something major popped up to give me an out. Besides all of the work it needed to the naked eye, the inspector found a small structural problem with the front porch. We then asked the bank for a $3300 price reduction to help with the costs to fix the porch. They countered with $2500 of the sale price or $2500 credit at closing. I took the credit, and took a loan out for $35,000... on a house not a car! Ha ha!
So the day before closing on Deal #1, I was on my lunch break at work looking at properties on the computer. I was showing a friend the house I was closing on, then noticed a $10K price reduction on another home. Oh my gosh, it was the property I had first made an offer on for $33,800 that was rejected. They now had it listed for $39,900. Wow! I was on the phone so fast to my realtor. We resubmitted the original offer, but made it a cash offer hoping they would bite. Nope. But they came back at $39,900 and I took it gladly! It's a cute little started home 4 bed/1 bath in the city. The cool thing is, both of these properties are less than a block away from one another. I can go out the front door of one to look down the road at the other.
I should be able to rent them both out for $900-$1000. I have my eye on Deal #3 and #4, but need to tighten up my fix it crew before I go any further. Plus, I want to buy, hold and rent all of these, so I need to get one of them fixed up and rented before I ask for refinancing... I think. I have a bank that told me they would after 3 months, but I wouldn't mind finding one who will do it NOW! My goal was to have 2 by the end of the year, but I have momentum now and I don't want to stop.
And, if I do wait longer, #3 and #4 might drop their prices as well. Oh, what fun!!!
Great job, here's to another one!
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don't you just love those cute little things that will bring in the cash??!!
Congrats! can't wait to hear about the next ones!
Valerie
Valerie
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Congrats on deal #2!!! Sounds like some mega fun going on!!!