A Little Fun...Who is Most Creative?

8 Replies

Here is your opportunity to show your brains and creative business strategies.  Let's have some fun, and see who came come up with the best idea for financing this deal.  Dazzle me with your brilliance or baffle me with your nonsense, it's your choice.

Scenario: SFH in Canton, Ohio priced at $68,900 cash purchase only. Auditor site values at $112,000 in 2017. Tudor style home, 3 bedroom, 6 car attached garage. Large living room. Radiant heat, central air, beautiful woodwork throughout the home. Remodeled kitchen with custom cabinetry. Main floor and bedrooms only need new paint, all floors on main and 2nd floor are solid hard wood and in excellent condition. Exterior is brick. 1859 sq. Ft. All windows are in great condition, roof and mechanicals appear to be fairly new and in good condition. Lot size is 7,957 sq. feet - small with easy maintenance. Security system, paved driveway. Public water/sewer.

Main Floor and 2nd floor have no odor, no mold.  Basement has mold and STRONG mildew odor.  Used to be carpeted with bar in basement, carpet was removed.  Woodwork shows signs of water damage and green mold.  It appears a pipe on the ceiling for the heating system has frozen and broken.  Ohio winters can be brutal.

Projected Repair Cost - $10,000

Home is 5 minutes from a major private university, and 5 minutes from a major seasonal tourist attraction.  House sits right by express way which leads to the tourist attraction.  

Strategy:  $550 room rental for 3 students for 9 months. Fully furnished including appliances and utilities.  $85 per day Air BNB during summer tourist season.

Bank wants cash offers but you only have $5k due to another deal you have in progress.

RULES:  You have no family or friends to invest, you only have your brain and your creativity and $5k cash.  Hard money lenders want 20% down.  How do you buy this house cash before someone else sees the opportunity that you see?   What would you do??    Would you walk away, or do you want to play? 

READY...SET...GO!

Use your money to fund the better of the 2 deals. Without knowing what the second deal is it sounds like the one you laid out is better. Cash buy means fast closing(I believe). Additionally, you are essentially walking in to 35K in equity with the gap between purchase price and ARV. Re-negotiate 2nd deal (you still wanna deal but only after the other one). Then cash out re-fi or HELOC to capture the second deal.

Originally posted by @Account Closed :

What other numbers you need?

 Specific expenses for each income option (student, ABnB).

Also, did you ever find out why the seller wants all cash?...and, would they accept some type of seller financing, if in the long run they made more money?

I would use some private money lenders who pay for the whole purchase price, then either ask for 5k in repairs or put the remaining repairs on a low interest credit card and pay off quickly. 

Originally posted by @Kyle Novak :

I would use some private money lenders who pay for the whole purchase price, then either ask for 5k in repairs or put the remaining repairs on a low interest credit card and pay off quickly. 

 Great idea, but I dont know any private lenders who do 100%.  Many say they do, but it is reimbursement at closing which doesn't help.  Do you know any?

Originally posted by @Joe Villeneuve :
Originally posted by @Lisa Kovac:

What other numbers you need?

 Specific expenses for each income option (student, ABnB).

Also, did you ever find out why the seller wants all cash?...and, would they accept some type of seller financing, if in the long run they made more money?

Only difference in expenses that I know of is more work for me washing sheets after each visit and any cleaning for the AirBNB.  The per day charge already includes the fee to use AirBNB app.

Bank owned.  Cash only is what realtor told me, no other options. 

 I am seeing this more and more around here.  They will drop the price 15k and say cash only for houses that would not pass inspections.

Originally posted by @Account Closed :
Originally posted by @Joe Villeneuve:
Originally posted by Account Closed:

What other numbers you need?

 Specific expenses for each income option (student, ABnB).

Also, did you ever find out why the seller wants all cash?...and, would they accept some type of seller financing, if in the long run they made more money?

Only difference in expenses that I know of is more work for me washing sheets after each visit and any cleaning for the AirBNB.  The per day charge already includes the fee to use AirBNB app.

Bank owned.  Cash only is what realtor told me, no other options. 

 I am seeing this more and more around here.  They will drop the price 15k and say cash only for houses that would not pass inspections.

 I need "specific" expenses (i.e...insurance, taxes, etc...) paid each month/year by you.

My plan actually involves doing both Student and ABnB strategies.

Usually, when a Bank says "cash only", they mean they will not finance the deal...not that you can't use a loan.  You can still use a loan, since the loan gives you cash...which you then give to them.