As I sit here at almost Midnight ....I am contemplating my phone call to the success academy in the morning. Why? Because I just scheduled to meet a seller in the morning for brunch to sign my FIRST DEAL,and I don't know how to fill out my first PURCHASE AND SALES agreement.
Here is the email I received from the gentleman in response to my Craig's List ad.
We just spoke briefly. I actually have 2 properties available, this is the most feasible one for an urgent transaction. Two story 1,652 sq ft. 5 BR 2 BA home with a very spacious living room & huge country-style kitchen. Gas furnace & water heater, fully carpeted (new in 3 BRs) except kitchen/baths. This property is on a 1/3 acre lot in a great location, great condition. (It can be partitioned into as many as 4 parcels.)
Also includes 2 car garage with workshop & storage room, which has above it a very cute 940 sq ft. 1 br unit. It had a recent total remodel, in excellent condition. We refer to it as an 'apartment' but would be called a house if it were on the ground - it's bigger than most 1 br houses.
Currently both units are occupied by very happy excellent tenants who get along well. We get $1650/mo. Marion Co. assessed RMV is 221,500. We have a recent clean P&D and full inspection report, and an independent pro appraisal from 11/07 @ 245,000.
I need to get as close to 160k as possible, but cash talks VERY loud and I'm an excellent listener. There is no distress, everything's current, we just need to relocate ASAP and aren't into being out-of-state landlords. Terms are possible also, with a significant (30%) down. "
After looking at the Email I called the man and I began to build a rapport with him. He lives near me on some acreage in a nearby town. He turned out to be an older gent that was wanting to move south to get away from the snowy winters. Their arthritis is the problem. Thus I found their Motivation.
In my AD on craigslist I flat out asked for Motivated sellers to call me. In ONE day I have had 2 people BEG me to buy their home. No looking for them......THEY CAME TO ME. A simple ad may have just earned me THOUSANDS of dollars.
The moment I finished speaking with him I told him I was VERY interested and that I would begin working on the private money to make it happen.
After speaking to a Hard money lender that my RE agent refered to me.....He told me that it all was sounding very good and that we might have an answer within 24 hours of looking at the property and getting it appraised.
The issue of a down payment came up and I mentioned that I would PREFER not to have any down. He told me that the lender would only cover 60%LTV without any "skin in the game."
The issue I had now was that the ACTUAL appraisal has NOT occured yet, thus we are just speculating on FMV at this time. He guessed that we should use the $230K
As a number for a moment.....the LTV at 60% of funding would be $138K as the MAX amount of the loan that would be available to me with that ratio.
My first thought was....."how do I get the guy to accept less money for this ALREADY great deal?" Then my schooling HIT ME.
Ask the seller to Carry PART of the loan payable in 12 months. I called him and HE AGREED. I will give him 120K at close and he will carry $40K for 12 months INTEREST and PAYMENT free.
I am meeting him in the morning .....pray that all goes well. The Reason I went with the 120K as a Loan amount instead of the 138K is that we don't REALLY know where the appraiser will come in.
BUT WAIT.....it gets better. The Hard Money guy says what they are doing right now is ROLLING the FIRST YEARS payments INTO the loan. Thus....ALL RENT PAYMENTS WILL BE CASH IN MY POCKET for the first year....$1650 a month currently.
So in the end.....HOUSE AND APT......NO MONEY DOWN....AND FREE YEARS RENT.
THANK YOU DEAN......I was watching TV at 1 in the morning one MONTH ago....I bought BARM.....it has been exactly ONE MONTH since the fire started to get started. I have been up until 2 and 3 in the morning since my focus has been REI.
If all of this actually goes as planned tomorrow.....there's no stopping this train.
BUILD your knowledge base....it is your ARSENAL to wage war against disbelief and the negativity of the status quo. You need your weapons......It's your choice whether you carry them or not.
Build Relationships and open the door to opportunities that could once only be dreamed of......never take those relationships for granted.
Don't let EXCUSES be the nails that keep you INSIDE the box.