Let’s recap my first deal:
Investor wanted to assign contract to me on property with ARV of $110,000 for $200.00 earnest money. Contract was to buy all cash at $56,000. Property needed $15,000 in minor cosmetic clean up repairs. After I could not sell to another investor or any other party for an all cash price, I approached seller and ended up taking the property subject to the existing financing at balance owed of $53,000 plus closing costs of approximately $670.00. Seller agreed to make next 2 months mortgage payments of approximately $700 per month.
At the closing table, the seller surprised me by giving me a check for the next 2 months mortgage payments which in essence he paid me to take the property off his hands. By the way, I was somewhat worried about this (needlessly), but the seller was super appreciative of me helping him out.
We advertised the property with ugly signs in front yard, front window, and on each end of main street leading to property. We ran ads on Craigslist and Zillow every week offering an open house for 1 hour each weekend day. Our ads all said no bank qualifying, work for equity, special programs etc.
Today, 63 days after first taking possession, we have sold the property!!!!! Closed this morning!!! Besides advertising, the worst we did to the property was cut the grass, clean one very ugly shower and clean the refrigerator, LOL, previous tenants left plenty of food in Freezer and Refrigerator and the power had been off since early July in Middle Georgia. YUK!!!! My son was not pleased but he did a great job cleaning the fridge and the shower. He’ll be OK, I paid him $350 and he is currently an unemployed teenager who thinks thumb twiddling is a life skill.
So, details of closing – We sold using owner financing. We wrapped the existing mortgage. Everything closed by attorney. Selling price $80,000! Buyer paid $6800 down nonrefundable. We agreed to take $3400 cash up front and to $141 per month for next 24 months to cover down payment. Buyer is paying $850 per month. We expect to see at least $20,000 when the buyer finally cashes us out. So, we hit the big 3!!! 1. We have a good size check up front, 2. We have positive cash flow of about $240 per month for first 24 months and then $150 month after that. And 3. We expect a big check on the back end.
Buyers agreed to credit enhancement provided by Screen the Tenant (Fabulous resource!!!)
Wow! Cannot wait to get more in the inventory!! Thanks Tony for all your help! And thanks Ron LeGrand for your wonderful teachings!!!
John Kotlarski, GA