My First Deal
In 1979 at the ripe old age of 20, I was a fairly new Real Estate Agent yet one of the top listing agents in the area. While going through the expired listings early one morning I came across a bank REO listing that looked interesting. I ran by the property and it was badly overgrown and barely visible from the street, but I made my way to the house and had a look around the property... I decided it would be a great deal if I could work it out. I ran home, woke up my at the time girl friend who was a college student and worked nights - I told her we were going to go buy a house (we were not yet married and we had next to nothing in the bank at the time). So this was going to be "interesting". We went to the property with flashlights in hand had a good look around and made a rough punch list, the property had been boarded up for 5+ years. By the time we left the property, my head was swimming with thoughts of how to pull this off.
So here is how it went:
The listing had expired, so I contacted the bank directly as a Realtor and the "standard" commission at the time was 7%
We put in offer on the house for $22,000
We were going to go for a 95% PMI Conventional Mortgage, which of course meant we needed 5% Dn Payment.
I used the commission agreement as my down payment, and got a check back at the closing for 2%.
We moved into the property as we rehabbed it, which took about 3 years (we were actually not in a hurry to sell it). But we ended up spending around $6,000 plus blood & sweat.
We sold the property for $69,900, and took back a $14,400 2nd Mortgage.
We moved on to other properties, and another state while our monthly payments came in. Then about 2 years later they started getting behind on our mortgage, then we found out they were behind in the first mortgage as well...long story short, we had to foreclose on the note we held and pay the first to keep them from foreclosing a senior lien first...the day of the sale at auction, we were served with a notice that they had filed for bankruptcy, which stayed the sale and the auction was voided.
After getting an education in foreclosure, I now had to learn about bankruptcy.
Since we were now living in another state, we had an attorney handling it all - I was never comfortable leaving things to other people, especially when we had a lot to lose. Good thing, because the attorney had dropped the ball and was about to miss a deadline for the bankruptcy hearing - I spent 3 days going through evertying I could find on Bankruptcy - I went to court, filed pro-se (for myself) against the attorney for the people that were trying to stop me from foreclosing...We won!
So I then foreclosed, and actually got them out while keeping the 1st mortgage current, we re-fixed the property (about $4,000) , and re-sold it.
Lucky for us, the market continued to improve over the years...we sold it the 2nd time for $143,500.
Add up the costs, and the sleepless nights, and we still did pretty well.
True Story and My First Deal and a big education - I never stopped!
Thanks for reading