Originally posted by @BA R.:
Sorry for not going into details but this is going to be kept under wraps until I get it started. Obviously once I get the ball rolling the cat will be out of the bag but that cannot be helped.
You can add this post to the "critical but hopefully not mean" list...
I slept on this for 2 days tryign to shorten it. Apoligies alll around for the length.
J, let me start this with saying you automatically have already EARNED my respect , for no other reason then you started this site to GIVE info to those of us who need it with out any cost . Oh sure there are upgrades in member ship, which I am seriously considering an upgrade on, but the basic info is free. Automatic respect is NOT something I just handout. You do not come across sounding like you assume every one is in a position to just jump in with both feet regardless of circumstances you know nothing about.
As far as the fact if no one is doing it, there is a good reason, you are absolutely correct. The reason is, it is not nearly as profitable as the way things are typically done. It's a huge pain in the butt if you want the truth and I know it. The politics alone will send any person who's goal is just profit running, screaming into the night. Most investors do NOT want to deal with that. I can't blame them. The venue I have in mind is NOT suited to most peoples taste. Honestly, it is not suited to my personal taste. This is a ministry thing. Check out my linked in, Barbie Rede, for more details on that. It will give you the bare boned basic idea.
Part 1 of the “secret sauce” is some intensly creative financing. I have never heard of anyone arranging this kind of a deal. Logic says even asking is insanity in its purest form. My logic is I can't get a yes , if I dont' ask. I figure it will take direct acts of The All Mighty Hisself to get that part done. If I can pull it off, I'm “in like Flynn”.
Part 2 of this “secret sauce” is the market. If my research is correct I should be over loaded with applications from tenants who will meet the criteria I set. Target area is Texas coast. The fact I recently discovered I can write in one day evictions, is a major bonus. Coast is due to blue water capablities.
The challenges are; 1. how hard can I push on certain “ go away NOW' eviction items I would love to put in the agreement and still be legal. I figure there will be an over turn on any property I get set up until things settle out.
- How technical can I get in the application process to mitigate certain issues before they happen, and remove or reduce these two potential problems in advance. The details are going to take an attorney.
While I am reasonably sure there is a perfectly legal way to solve the issues in this, I don't see any sense in asking about those issues in the forums since even the most helpful answer cannot give legal advice.
Wealth building aspect is build equity. Paying off debt load faster is in business plan.
Even with 100% financing, we all know there are bills that have to be paid by buyer. I figure best case scenerio out side of the normal marketing is some minor rehab will be needed. I can't put any skin in the game until I sell my house. Even if I talked to my banker, it's a small home town bank. They do not do out of state loans for any one except the “big boys”. There is no reason to believe anyone in the BP would consider me as a partner since no one knows me and “my skin” is not liquidated yet. Same thing as far as any potential investors on BP, especially with what I have in mind on financing While it is a win win, until I get some legal answers on a few other minor points, talking to an investor even if they were interested, debt cost was in my ball park etc, would be a waste of their time. All of this takes time. My clock won't start until I have cash in my pocket.
Yes, I have seriously considerd selling to a local slumlord. That is probably NOT going to happen. Around here , EVERY ONE knows what they do. They give you a song and dance that it will take x dollars to make it rentable , when they have no intention of putting one red cent into the property, RTO it at 20 x or more of what they paid with a contract from you know where. The real insult is if they offer 1 K they act like they are doing you a favor. How do I know? I checked this option out long ago. To make it worse on a regular rental, they won't do any thing. ZERO maintence is the rule. Around here the term RE investor equals slum lord.
J, normally I would not go into this but since your the owner of BP and you hopefully realize I am not trying to use an inappropiate forum to solicite this property, heres the scuttle butt. I'm purposly leaving out details to make sure no one misconstues this as soliciting a buyer.
Yes, I am seriously considering getting the PRO member ship, advertising my house ( at 60% of current retail). Bids for the repairs needed average 3-4K for labor and materials. To be fully updayed figure another 1300.00 ( electrric) The ROI is good. If you look at it purely as an investment place, as in ROI, based on local rents or on a RTO. So far what what Im seeing in the articles and books, SFR is not looked at like commerical so that probably is not going to impact any ones decision on buying this place. Depending on debt load, the numbers I crunched say cash flow is pretty darned good. The comps stink from the tax sales and all the "1K is all we are going to offer", slumlords.
If I was going to be close enough to actually manage this place, I'd put my plan into action and be pulling cash out of it in a heart beat, except for one needed resource that simply does not exist locally. That is a KEY part of the " secret sauce". When I put it all together, I'm figuring I am going to have to go to plan B on my exit strategy and do a RTO. Not happy with it but.....
As far as the other parts of the plan, its the same old boring burger every one is doing. Buy cheap with 100% seller financing if I can get it or as little cash up front as possible and if they cant work with my numbers , move on to next deal. The “secret sauce” is nothing more then the terms of the financing I hope to pull off and getting butts in the seats.
I'd bet money most investors would no more be intersted in this kind of a deal as far as the buy and hold part then they would use 100 dollar bills to light their furnace. But I'd also bet there are some out there that may have already figured this one out and given the details, find it opens up deals they previously walked away from. As I said earlier, eventually the cat will get out of the bag. It ALWAYS does. Thats fine. Keeping my big mouth shut on details may or may not work. If some one beats me to it, oh well. Hopefully no one else puts this exact same combination together and I can get my feet in the door and get setup wth at least a few properties before the cat leaves. I am not looking to be some intensly huge conglomerate over this phase of the long term plan. That part I already have scoped out. The reason this post got written is I had a MAJOR AHA! Moment and wanted a sanity check. THANKS to one of the responses I figured that out! It literally blew me away! Had I any idea it was going to snow ball like this, I dont think I would have posted it.
Any way thanks to all who responded.