I can't begin to tell you how excited I am to say that I have had my 1st offer accepted. I know when I read other's posts about their first deal I wanted details so here they are with a little background.
I'm in Southern California and was having a hard time competing with the cash offers out here. Also the market is not what I would consider strong and we have a high unemployment rate. So I began to "Think a little different" and decided to find out where the jobs are. A family member mentioned a couple of areas so I started doing research. A lot of research. I looked at websites advertising jobs, went to Craig’s list in those towns and was able to get a good picture of the real estate and job market there; what was for sale, who was looking for rentals, etc.
I took out a HELOC (Home Equity Line Of Credit) on my home for the money and after doing more homework decided on a property. I talked to the realtor. But before I could move forward the home had sold to a contractor. I told the realtor that if it should fall out of escrow for any reason to please call me. It did and I didn't waste any time finding a contractor to give me a bid on repairs to either make it a rental or to rehab and sell.
I found the contractor by calling a church and asking the Bishop directly for a referral. Since I will probably never step through the front door of the house I bought (hard concept for me to grasp) I am having the inspector come back at intervals to confirm that the work is being done by the contractor as it should be. (Thank you advisors for that idea)
So here is how it looks:
Listed as a 2/1 but will be a 3/2 when the work is complete.
Asking price $71,900 reduced to $55,000. It was sold for cash at $42,000. I offered $38,000 cash and it was accepted.
Estimated repairs and rehab $20,000
ARFMV (After repair fair market value) $120,000
Purchase price $38k
Other cost est. $5k
if sold at $110k $47,000!!!!!
I could also market it wholesale or rent it for $750 to $800 a month. But since my HELOC is adjustable I would rather make the cash and use it for another purchase. I will be getting my buyers list for that town ready tomorrow.
I started learning about real estate in March of this year. To think that I could earn this much was - I repeat - WAS outside of my thought of possibilities.
Even though I am excited I am also feeling calm about this. I know from my hard work that this is a good deal. The numbers work. That's the bottom line.
Merry Christmas to you all!
"Faith is taking the first step even when you can't see the whole staircase."
~ Martin Luther King, Jr. (1929-1968)