Should i buy this property????

Question

Hello fellow investors! We have a triplex under contract with seller financing. Our monthly payment will be $600. The property has a 1 3 bedroom apartment, 1 2 Bedroom apartment, and an efficiency apartment. The 2 bedroom needs the smallest amount of work ($400) and would be rented first as its the easiest and cheapest to get finished and that unit would bring in $600. The other two units will require more extensive renovations. We aren't in the position to make the first $600 payment to take over the property at this moment but we don't want to lose the deal. Ideally we would purchase the property, make the repairs to the middle unit first, get it rented, and work on the other 2 units as we get more capital. What do you suggest???

Thomas S. · Answer

I will be very negative. If you do not have $600 for your first payment you are not prepared to be a investor. You are crazy to even consider going forward without a minimum 6 month reserve funds as well as all the cash to do the renovations on all units up front.

My guess is if you go forward you will lose the property within those first 6 months due to lack of financial forethought.

Jacob A. · Answer

Jalil,

Seems like this deal is a solid deal if you can get the other units rented! The one thing I will caution you with is this, if you are struggling to make the $600 payment, you might want to evaluate if you are really in a position to be investing. I am by no means trying to be negative, but the truth to real estate is that you will need *some* money especially if you are saying renovations will be required.

Account Closed · Answer

I suggest patience. It will be a good skill for real estate as well. You could bank up until you have more capital and let this deal go. Trust me there will be more deals in the future. It's also possible for this deal to be there by the time you save up more cash. I know the feeling of wanting to close on a successful looking deal.  You will find out that more deals will present themselves while you are building your cash reserves.

Good Luck Jalil !!

Grant Rothenburger · Answer

This does sound like a good deal. Do you know anyone who could potentially lend you some money for first month and repairs? If you can't pay the $600 right now and can't borrow money, this might not be the right time for you to purchase. I don't want to talk you out of it, but you will need some money as @Jacob Atkinson said.

Ben Leybovich · Answer

If you can't make the $600 payment, you've got more pressing issues to sort out in your life than how to do a deal...Assign the contract to someone. Use the money to help clean up your act.

Good Luck!

Joe Garvin · Answer

I agree with the last few post that if you don't even have $600 to make the first payment then there is far too much risk in this venture.  I spent 15 years as a registered Investment Adviser and trader and we always preached maintaining AT least 3-6 months emergency funds (monthly expenses COMBINED) at all times.  Now,  allot of folks didn't follow our advice and I witnessed financial disasters with more than one of my clients and felt if they had only forgone the BMW lease and saved that $700 a month they wouldn't be in the situation.  It may seem like an insurmountable number but with the right plan and lots of discipline it most certainly can be achieved.  Look at this as a money management lesson that will be dividends once/when you do start making good bank, that hopefully your period of frugality will drive your money decisions going forward.  Good Luck Jalil- but I don't think its the right time to make the plunge!

Jay Helms · Answer

Some solid advice here @Jalil Carter. Kind of scary that the property is completely vacant but do you have someone you can partner with on the deal?  Happy to help you run the #s if desired.

Mark Tallent · Answer

If you already have a seller finance deal then I would I assume the seller is willing to work with you. I would ask to delay the first payment and just have the next few payments be higher say.... $700-$800. Good Luck! Keep us updated, would love to know how it turns out.

Should i buy this property????

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