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Offer accepted - closing on door #8

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    Offer accepted - closing on door #8

    I know this isn't a big real estate group but since I've seen some new interest lately (and I'm excited and don't have anyone to share with!) I thought I'd share my latest rental purchase. It's a 2 bed, 1 bath 850 sq ft SFH. Walking distance from local university. Last rented for $700/mo. Came across it as a FSBO. Looked at it and while it needs some work, it has excellent potential, is priced WAY under market value and is in a great location. I offered him full price with 10% down on the contingency he was willing to owner finance for up to a year while I rehab, rent and eventually refinance to a traditional mortgage. Here's now the numbers break down.

    Purchase price: $74,000
    Down payment: $7,400
    Monthly payment: $443/mo ($66,600 @ 7% on a 30 year amoritization)
    Rehab cost: $25k (includes new roof, kitchen reno, moving a few walls including enlarging both bedrooms and creating better flow, deck repairs, tuckpointing and flooring)

    After renovation value: $130k
    After renovation market rent: $1,200/mo

    Benefits of the owner finance I structured are 1) lower down payment (my lender requires 25% for investment properties) which allows me to keep more cash on hand to complete renovations 2) Once rehab is done I will refi with my bank to recoup the cash I spent on renovations while maintaining 25% equity so I'll not have spent anything out of pocket and have a new mortgage just under $100k with a payment under $450/mo.

    Looking full picture at my real estate portfolio, this purchase should put me at a valuation juuuust over $1M which if I'm being candid never seemed like a possibility when I started on this real estate investing adventure in 2015.

    #2
    That's fantastic! Congrats on the acquisition, and good luck with the reno. Sounds like a great opportunity.
    "Praestantia per minutus" ... "Acta non verba"

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      #3
      Congrats! What an opportunity
      LivingAlmostLarge Blog

      Comment


        #4
        Owner financing.... dang, you're doing this right. Wishing you an easy reno, and lots of success! Sounds like a great opportunity.

        Comment


          #5
          Hope you make a bunch of money !
          Glad to see more folks doing real estate and other things with their $$ rather than relying solely on the stock market.

          Comment


            #6
            That's quite the score finding a house below market at this time. Clearly you keep a close eye on your market and know how to spot a good deal. Congratulations!

            Comment


              #7
              Originally posted by scfr View Post
              That's quite the score finding a house below market at this time. Clearly you keep a close eye on your market and know how to spot a good deal. Congratulations!
              Obsessively so even when I’m not looking to buy. Zillow and local real estate boards are part of my daily ritual.

              Comment


                #8
                Originally posted by riverwed070707 View Post
                I know this isn't a big real estate group but since I've seen some new interest lately (and I'm excited and don't have anyone to share with!) I thought I'd share my latest rental purchase. It's a 2 bed, 1 bath 850 sq ft SFH. Walking distance from local university. Last rented for $700/mo. Came across it as a FSBO. Looked at it and while it needs some work, it has excellent potential, is priced WAY under market value and is in a great location. I offered him full price with 10% down on the contingency he was willing to owner finance for up to a year while I rehab, rent and eventually refinance to a traditional mortgage. Here's now the numbers break down.

                Purchase price: $74,000
                Down payment: $7,400
                Monthly payment: $443/mo ($66,600 @ 7% on a 30 year amoritization)
                Rehab cost: $25k (includes new roof, kitchen reno, moving a few walls including enlarging both bedrooms and creating better flow, deck repairs, tuckpointing and flooring)

                After renovation value: $130k
                After renovation market rent: $1,200/mo

                Benefits of the owner finance I structured are 1) lower down payment (my lender requires 25% for investment properties) which allows me to keep more cash on hand to complete renovations 2) Once rehab is done I will refi with my bank to recoup the cash I spent on renovations while maintaining 25% equity so I'll not have spent anything out of pocket and have a new mortgage just under $100k with a payment under $450/mo.

                Looking full picture at my real estate portfolio, this purchase should put me at a valuation juuuust over $1M which if I'm being candid never seemed like a possibility when I started on this real estate investing adventure in 2015.
                very nice. looks like a good find
                Brian

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