Another congrats to throw on the many comments! Would also like to know about bank negotiations and how you were able to fix it up before getting the VA loan? Do they give you a period of time to fix things up to their standards?
@Jarrett Winston Based on what you wrote, it sounds like you got a VA loan, which is supposed to be for buyers intending to owner-occupy their properties, and used it to purchase a single family house that you intend to rent. Correct? Or did you leave something out?
Love your story @Jarrett Winston , thanks for sharing. I often see active duty asking if they should start now or wait until they go civilian. We started investing while my husband was active but what we did was much more hands off with out of state and a team in place to handle things. Your story really shows that with determination and persistence you can get anything done. Congrats!
Great job! and thank you for your service
Goals! Thank you for your service!
@Kyle J. I think he's living in it. You have to live in it for at least a year unless you get orders to another location
Great Job! Just a word of caution about Alamogordo: I was just stationed there for 4 years. I have friends with houses there they can't sell. I'm guessing ones that look as beautiful as that one you just completed will sell, but the market may get wonky after the Germans leave. It already felt like there were FAR too many houses on the market due to the new builders that came in and built all new neighborhoods - which the military folks bought - leaving all the older homes with no one to sell to.
Best of luck!
After going back and forth with the bank for months we finally found the winner. It was a foreclosure listed on the MLS for about 6 months.
4 bedrooms, 2 bath, 1700 sq ft. Built in 2005.
Originally listed at 169k with a price reduction to 139k
We ended up paying 104k after going back and forth with the bank for months.
many asked how Jarrett got the great deal of paying 104K when the initial asking price was 169K. This is my speculation. I don;t know the facts, since I don't know the details to the deal.
1. Bank Foreclose. The bank is trying to sell it for what they believe they can get. Initially it was 169K. No buyers.
2. 6 months go by, the bank lowers the price to 139K. They are still trying to sell it for what they believe they can get. Please note, this is not what is in default and owed to the bank. We will never know that number. Also note that at least 6 months have gone by, and the bank needs to reflect this non performing loan on their books. Two quarters (for bank reporting purposes) have gone by, and people are taking notice. As time goes on, the bank needs to make this loan disappear from their books. They are now more motivated to sell it.
3. In the case of bank foreclosures, offer what is owed, and not a penny more, if you want a fast close. They will gladly take it, as it closes out their books, and they did not lose money on the loan. You can offer then less then the loan default value, and as time passes, their motivation increases. Please note, if the bank sold it short (at a lost), they will send a 1099-Misc to the person who defaulted on the loan, as income, since that amount of the loan was in essence "forgiven" and thus reportable and taxable income.
How did you rehab your home before the appraisal? I thought you can't technically have access to the home to do work in it until after closing? How did you set that up?
Great job and thank you and your family for your service!!
Great post, thanks for your service! Can you tell me what the living room flooring is? It's stunning!
Great job-on your new real estate and military service!
How i got it down to 104k= Basically Chester Lee explained it. Basically i got lucky and was in the right place and right time. Due to miscommunication on the banks side we ended up getting a better deal. Basically we were dealing with lady x at this big mortgage bank working out the details, who was gonna pay for closing costs and if i could put repair money into the deal and then all the sudden lady x cant be contacted for a month and i thought the deal was done and i was back to square one then my realtor got word they had reduced the price again out of nowhere. So we submitted a new lower price and got it finally under contract. Crazy situation.
How i fixed the house: Basically the realtor gave me the keys and said fix it at your own risk.
Also i live in the house. I put the rentals numbers on there just based on my knowledge of the rental market.
The floor is from Lowes. Pergo weathered oak laminate. . Highly recommend.
Great deal + awesome story. Thanks for sharing & appreciate your service!
Thank you for your service, and amazing story and work!!!
Firstly, congratulations! Sounds like a great deal! However, I think this a bit misleading for two reasons. You are not going to make 100k when you sell. Usually you will lose around 7% in sale with commissions, title fees, etc. (~15k) Additionally, sounds like you are living in it. If so, great! If this is your primary residence and you live in it for 2 years you avoid yet another charge: capital gains tax (probably 15% in your situation - another 15k). Anyhow, 70k profit is awesome! Congrats on that!!! That's roughly a 60% return on investment which is HUGE!
Regarding getting a HELOC on the property, a word of caution... you could very easily put yourself in a bind. If a flip goes wrong, now you are pretty close to underwater with primary residence. Just watch out. Leverage is king to making huge returns, but too much leverage causes risk. Try to forecast what would happen in a bad deal and see how it plays out.
A phrase I like to live by: "Keep your eyes in the sky, but keep your feet on the ground". Best of luck brother!
Nice, I'm at Holloman right now as well. I'd love to pick your brain when you get back!
Free eBook from BiggerPockets!
Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!
- Actionable advice for getting started,
- Discover the 10 Most Lucrative Real Estate Niches,
- Learn how to get started with or without money,
- Explore Real-Life Strategies for Building Wealth,
- And a LOT more.
Sign up below to download the eBook for FREE today!
We hate spam just as much as you