This market never ceases to amaze me.

13 Replies

About a year ago a local investor that got in over his head approached me to purchase a few or his properties. The prices were extremely high and I told him so. I did finally purchase one of them last summer which wasn't such a good deal but I worked out some creative terms that I could live with.

This investor continued to call me every so often trying to unload the last two of his properties. I told him he was too high and he said he could not go any lower due to loan payoff. Finally last month he called me and said the bank would be willing to accept a short sale offer on both of the properties. I called the banker to see what he had to say and submitted my offers.

To my surprise the bank accepted one of my offers and countered on the second. I told the banker that I was not interested in the counter offer but would go ahead with the accepted offer.

Here is the deal. 3 bedroom house in OK shape, good roof, vinyl sided, rented for $400 per month with tenant responsible for all maintenance on the property for entire lease term. My offer $2000. The outstanding loan was $12000+, back taxes of $1500, county appraised at $33000 (a little high). I went into closing with $2057 for the purchase and left with a check for $740 for rent proration and deposit. So my total cash into this free and clear property is $1267. The back taxes were paid a closing.

I guess the point of the story is you don't get anything unless you ask. The worst they can say is no. And every once in a while you get a yes. Get out there and make it happen.

I think the title of your post says it all. Once every twenty years or so the prices in certain areas go so low that the buy and hold investor can't help but get rich. In some areas of the country we are in that part of the cycle. Your expertise at negotiating and patience at such doubles the positive outcome. Good job.

Very true indeed.

This year I have seen a short sale with a $1.00 payoff, and an REO flip (same day) with 7yk profit.

Loving this market!

But can we agree to let everyone else think that real estate is still risky?

OMG Jay. That is unreal. I didn't even know you could buy a house for so cheap. That's amazing. Great job.

Congrats on what seem like great deals!

I spoke to one of my buddies in Austin today after being out of touch for almost a year. He told me he sold 93 houses on wrap notes last year and is currently buying about 8 per month with an average of $22k in equity. Nice!

Originally posted by Ophelia Nicholson:
Jay,
Congrats- Quick question - Where can I buy 20 of these deals?? Sounds way too good to be true man. Congrats again

I find them once in a while but I do not know where you can buy twenty at a time. Sorry.

Last year I bought one house for $600 and cleaned the carpets, fixes one plumbing leak and painted the walls and rented it out for $375 in a month. Also I bought one house for $75 and one for $50. I wholelsaled the $75 house for $5500 and still have the $50 one. All in all I have purchased more that 20 housed for less than $4000 each and have them all rented. Most needed a lot of work though. Keep looking they are out there if you are in the right area. Good Luck.

Originally posted by Jay Miller:
Originally posted by Ophelia Nicholson:
Jay,
Congrats- Quick question - Where can I buy 20 of these deals?? Sounds way too good to be true man. Congrats again

I find them once in a while but I do not know where you can buy twenty at a time. Sorry.

Last year I bought one house for $600 and cleaned the carpets, fixes one plumbing leak and painted the walls and rented it out for $375 in a month. Also I bought one house for $75 and one for $50. I wholelsaled the $75 house for $5500 and still have the $50 one. All in all I have purchased more that 20 housed for less than $4000 each and have them all rented. Most needed a lot of work though. Keep looking they are out there if you are in the right area. Good Luck.

jay those cheap houses what cities have u purchased those in if u dont mind me asking also how much in repairs you had to pay.another question is how were u able to get them so cheap

Those cheap houses offer substantial returns, but I'm curious about the risk involved. Despite doing your due diligence, have you had any unfortunate surprises? Have all your $50-4000 houses turned into profitable rentals?

Thanks.

Originally posted by Mathew Aron:
Those cheap houses offer substantial returns, but I'm curious about the risk involved. Despite doing your due diligence, have you had any unfortunate surprises? Have all your $50-4000 houses turned into profitable rentals?

Thanks.


=Stephen Moore]jay those cheap houses what cities have u purchased those in if u dont mind me asking also how much in repairs you had to pay.another question is how were u able to get them so cheap

Sorry for the delay in my response. I have been away on a working holiday for the last two weeks.

I have had some homes that only needed a few hundred dollars in repairs all the way up to 6-7 thousand dollars. I have turned all of them in to profitable rentals or sold some of them off. It is not too hard to make a profit on such a small investment.

These homes are not in the best areas so you know what kind of tenants you get. It is a niche that I have fallen into but if works for me.

another question is how were u able to get them so cheap

How do I find them so cheap. Well there are cheap homes all over this area. But to get the super cheap deals I network with anyone I know that might be able to offer a lead. There are mostly bankers, auctioneers, insurance agents, etc. I have people calling me on a regular basis. You also have to be able to ask for what you want and be willing to wait until you get it or there is no deal.

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