Did we make a mistake, just paid

[TJS]

37K for a DW repo !

Make this as short as possible, my brother, dad, and myself have started investing in RE. I wanted to go the rehab route but they both wanted to start "slow" and find older homes and mobile homes to rent. I really didnt have much say so as my dad is fronting all the money, we have access to about 300K. A friend of mine is a real estate agent so I told him about our plans and he said he would be on the lookout for us. Well about 2 months later he calls me and said we need to check this one out, so we do and the DW is in very good condition with all applicances except a frig. Very good neighborhood, best school district in the county, and access to major roads and shopping centers within 2 miles.

Greenpoint (it is a repo, thats why i was suprised of the great shape it was in) wanted 50K for it. The tax value on the DW and land was 78K.My dad and brother "wanted to do something" so they wanted to put a bid in on it. After some pushing and shoving they said 37K, so I called my friend and told him and two days later got a call back saying they accepted that.

My question, is that normal turn around time? And does Greenpoint just ask 55K and take 18K less for any of their homes? Or should we be on the lookout because the turnaround was so quick and accepted our "first" offer.

Just seems odd to me!

TIA

[Dan Auito]

Proof is in the pudding TS, now sell it for $55,000. If you can't then you will know very quickly! How much are you putting down? what kind of terms if any? What are your plans, Buy and hold, lease option, quick flip, contract for deed? Do tell my friend. :confused:

[TJS]

Hey Dan,

Thanks for the reply, well heard which I think is good news.

We have the DW rented starting May 1st. for 600 month. Actually my brother knew of a girl that needed a place fairly quickly (going through a divorce) and he told her about the place we had. She wanted to do a rent-to-own because her credit is not the greatest at the moment, so I suggested a lease option. She said she would probably need to rent for at least two years. To make a long story short she signed a 3 year lease option with an option to buy the DW in April of 2008 for $58K, (we will pick up all closing costs for her). We will have about 40K in it total, so hopefully this will work out for us.

And just got a call today from a man who got a promotion, but has to transfer to another state, and "just wants to get out of this situation". He got the house from his parents, he has no mortgage payment, and just "needs some money for another down payment". I am meeting with him tomorrow night! Wish me luck!

Again thanks Dan for the reply and the site, very valuable info here!

TJS

[ChrisGA]

the best advice I can give you is real estate is alot more, sure way of money. I personally would wanna get one at really low prices because they drop no matter (value wise).

i like stuff and stuff with wheels are good, profit margin wise, but if I had sources of funds personally I would invest in rehabs and double my money very quickly...just my personal preference.

I know people that only do mobile homes and financing that see 100% returns on their money annually. BUT THEY BUY THE HOMES RIGHT!!!!!!!!
Secrect to success, buy right

[TJS]

Just got the leased signed and if everything works out right should be 40K to the good in April of 2008!

One more question for you gurus:

As I mentioned before we basically have a credit line (or access to 300K), with the 40K that we spent it has dropped to 260K. We are in the process of looking at house to buy and hold (rent) that will cost us about 90K.

My question is this, if this goes through we will have spent about 130k of the money. Is there a way we can get that money back up to 300K or in the vicinity? If we show the bank that we are renting/leasing will they give us access to that money again? I hope I am asking the question in the right manner, I know what I want to say just dont know how to say it, any help would be appreciated:

Thanks,
TJ

[Clint]

Go over to www.creonline.com and buy two books, one is from Tony, the other is from Lonnie,

Creonline has a mobile home investment forum. Read the forum but buy the books. It will catapult your investing.

I bought Lonnies book for $30. last year, and made over 50K last year in cash, and I have cash flow every month.

You and your dad etc are on the right track, but with guidance you will turn that 260K into 2.6M in no time, I am not kidding. :SM058:

[David Leach]

Just got the leased signed and if everything works out right should be 40K to the good in April of 2008!

One more question for you gurus:

As I mentioned before we basically have a credit line (or access to 300K), with the 40K that we spent it has dropped to 260K. We are in the process of looking at house to buy and hold (rent) that will cost us about 90K.

My question is this, if this goes through we will have spent about 130k of the money. Is there a way we can get that money back up to 300K or in the vicinity? If we show the bank that we are renting/leasing will they give us access to that money again? I hope I am asking the question in the right manner, I know what I want to say just dont know how to say it, any help would be appreciated:

Thanks,
TJ

TJ,

If you are paying cash for these properties, you should have no problem getting a cash-out refinance on them. You can borrow up to 90% on investment properties with most lenders. Some of them will have a maximum cash out amount though, so you could be limited to those guidelines.

My question would be this, why aren't you leveraging this money? Instead of paying cash for property you plan on keeping as rentals or L/O properties, why aren't you using your funds for down payments. $300,000 can buy $3,000,000 or more of the right kind of real estate.

I wouldn't use my own cash to pay for a purchase unless it were part of a quick flip scenario where I would be getting it back, along with my profits, in 3-6 months. Of course, it depends on your personal objectives.

Best wishes,

David

[ChrisGA]

BUY the Properties at a discount 70-80% if not lower and then take the porfolio to the bank and say we want a package deal for financing and a new line of credit for the LOC we already have. Increase the money available,.......or i go to another bank................

and also for leverage tell them that u will promise to deposit all funds through the bank. Until the bank, wants to start acting funny.........with that i would go 7-8 package deals makes a bank real happy...........

[TJS]

TJ,

If you are paying cash for these properties, you should have no problem getting a cash-out refinance on them. You can borrow up to 90% on investment properties with most lenders. Some of them will have a maximum cash out amount though, so you could be limited to those guidelines.

My question would be this, why aren't you leveraging this money? Instead of paying cash for property you plan on keeping as rentals or L/O properties, why aren't you using your funds for down payments. $300,000 can buy $3,000,000 or more of the right kind of real estate.

I wouldn't use my own cash to pay for a purchase unless it were part of a quick flip scenario where I would be getting it back, along with my profits, in 3-6 months. Of course, it depends on your personal objectives.

Best wishes,

David

David,

Thanks for the reply, that is basically what I wanted to do, flip them, but my dad and brother wanted to "hold them for a little bit". They dont frequent the internet as much as I do and dont know the things you can do in real estate (not that I do either but I do alot of reading).

I guess the our flip will be 24 months versus the standard 6 or so months.

We are true rookies at this and might have jumped the gun on this deal but if it works out we should be OK in 2 years. We, and I, have alot to learn about this real estate thing. Is there a specific program the banks call their investment programs? If I read your post correct if you have a 100K property, you can borrow 90K (and use our 10K for the down payment)?

Again thanks for the reply,
TJ

[TJS]

BUY the Properties at a discount 70-80% if not lower and then take the porfolio to the bank and say we want a package deal for financing and a new line of credit for the LOC we already have. Increase the money available,.......or i go to another bank................

and also for leverage tell them that u will promise to deposit all funds through the bank. Until the bank, wants to start acting funny.........with that i would go 7-8 package deals makes a bank real happy...........


Thanks for the reply Chris,

we have done the "doposit all funds" already, might have to try the package deal thing though!

[ChrisGA]

Bet u 200 bucks that if that bank wont take them at a decent rate a bank in your area will jump on that like white on rice.

[David Leach]

David,

Thanks for the reply, that is basically what I wanted to do, flip them, but my dad and brother wanted to "hold them for a little bit". They dont frequent the internet as much as I do and dont know the things you can do in real estate (not that I do either but I do alot of reading).

I guess the our flip will be 24 months versus the standard 6 or so months.

We are true rookies at this and might have jumped the gun on this deal but if it works out we should be OK in 2 years. We, and I, have alot to learn about this real estate thing. Is there a specific program the banks call their investment programs? If I read your post correct if you have a 100K property, you can borrow 90K (and use our 10K for the down payment)?

Again thanks for the reply,
TJ

TJ,

A 24 month hold wouldn't "technically" be a flip deal. This is where I was saying that you should use your money as leverage to buy property. A true flip would be much shorter. It sounds like your DW situation is going to work out, so I wouldn't be concerned about it.

As far as being rookies, no worries. We all were rookies at one time or another in this business. The challenge with some newbies is to get them out of the old way of thinking about real estate, that is, that you have to buy property and hold it for awhile before you make your money. I would encourage you to keep learning and share that knowledge. Of course, it would be better if they were learning with you.

You might want to seek out the services of a mortgage broker over using a bank. While some of the rules are different between the two, mortgage brokers have more choices available for the real estate investor.

The loan programs aren't called anything special. Just let them know you are a real estate investor who plans on buying alot of property and are looking for investor loans with 10% down payments. Look for someone with experience because they will need to use more than one resource to get several loans done for you.

If you have any specific loan scenarios you want to run by me, feel free to send my a personal message. I'll be glad to help.

Best wishes,

David

[Dan Auito]

Way to go guys :praise: I don't always jump in to Jabber so I am glad to see everyone is taking the initiative to help each other. While I sit back and enjoy the show. Thank you all gentlemen, your making this site more valuable to everyone every day. People do see it! :beerchug: