All Forum Posts by: Austin Hughes

Well here, there is a memorandum of option that we can file at the county court house for $15. It tells the title company that I have the legal right to purchase the property. I still haven't figured out getting it notarized when she lives far away in another state.

I went based on feel here, and we ended up at 3 months. The extended option period for a fee is a good idea. I might use that in my contract the next time I gain an option.

@Marvin McTaw

That's interesting. Certainly useful.

What system do you use?

@Greg H. Haha please tell me you didn't bet on Tech today! We tried our best.

Energy and enthusiasm are two things I've got in abundance! Yes, it is in Lubbock.

Thanks for the reminder about the value of the property. I use a tool I built and one an investor shared with me to analyze cash flow. I know that the real value to an investor is based on the cap rate.

The agreement we have is that she will make sure it is maintained properly and in rentable condition. Another thing is I can't raise rents on current tenants. Since she's paying the bills still, she doesn't want to risk everyone leaving. But I talked to the property manager for an hour about everything he thinks can improve the property, so we have some good ideas to go on. My main objective is going to be to get the vacant units rented out at higher rates.

As far as financing, I have been talking with a local commercial lender who would be willing to lend on this one without long term leases with "the right situation." If that's the route I go, I will seek an outside investment. I would also consider partnering with another investor on this. My last option would be to wholesale it to an investor if they want to take on the property by themselves. Whatever way it goes, I just need to focus on getting the cash flow up, and then talking to as many people as I can about it until I find the right situation.

Thanks @Jonathan Towell

We both have some good projects on our hands now! I'm excited to see how yours comes along!

BOOM. She accepted it.

3 Months of option period with the purchase price at $265,000, seller pays all closing costs and taxes owed at the time of sale.

Appraised value is $330,000.

Time to get to work!

@Delles Simon Thought you'd enjoy this. Hope you're living abundantly brother!

@Joe J.

I have taken two new nuggets of information that are great from this. I am not looking for "the path" to getting something for nothing.

If the deal is excellent, I will ABSOLUTELY try to find a bank that is willing to do a cash-out refi without seasoning after purchasing with hard money. Any recommendations on where to find a lender like this?

@Bill S. Man, you caught some real life Judge Judy action!

I always wondered who those people were who just randomly set in on court hearings.

Surely, you then told the landlord sister you were the answer to all her problems, and scored the property at a bargain basement price, right?

My first reaction is- a Memphis Company doing a turnkey in Dalls?!

Haha, but either way, that's not a bad rental rate! You're positively cash flowing, AND putting money aside every month to cover the unforeseen happenings. 

DFW is expanding in a big way with all of the companies that are flocking to the area. Like others have said, hopefully the house appreciates too! Also, there are other strategies you could implement to make the most of this property.  Especially in high-appreciation areas like Dallas, Houston, and Austin, owner financing on a wraparound mortgage or doing a lease to own are GREAT strategies.

Here's what it would look like if you did a lease option:

• Sell the house for $140K-$160K on a 2 year option. (the high price is because of appreciation.)
• They pay you a down payment, anywhere from $7K to $20K, which is non-refundable.
• You rent it for slightly above the market rent, maybe $1400 or $1500. People are eager to pay this if they know they'll be owning the home and building equity.

Then, you can sell the house, net about $20,000 in profit, and take that $50,000 that you now have in cash to a better turnkey opportunity or lend to fix/flips at higher rates.

Exactly. I've always tried to put myself in other peoples' shoes. She will come out on top no matter what, like you said. Especially since she's been trying to sell it at this price for almost a year now (we talked first in February.)

It is definitely a calculated risk on my end, because I could be losing a lot of time, but if I can do what I think I can and get this puppy cash flowing $2000-$2500 a month, it'll all be worth it.

I found this one on Craigslist. I have automatic alerts set up for certain keywords, and it just popped up in my inbox (for the second time this year.) I use IFTTT to set up automatic things like that.

One idea for the "magic sprinkle" that I came up with today....and I'm hoping no local investors steal my thunder... but I'm going to set up a bunch of letters that express my appreciation for the property or the sellers' situations, and include the appropriate letter with each offer that I submit.

It is all one lot. Not a very big one at that. And yes I am using a Lean Startup approach to marketing. My direct mail is very targeted, and gets a really good response rate. Craigslist is good to me as well. I also use word of mouth heavily and have minions all over the city spotting vacant properties for me. As soon as I get my next payday, I'm going to ramp up the marketing with some different ideas I have been waiting to implement, and set up a full time phone system/call receiver to handle and sort the leads I get.

Thanks for asking these questions and expanding my thinking!

@Marvin McTaw

Most investors, including myself, are very spotty with following up! Haha

I just got on Zoho CRM to try and streamline my contacts/offers/follow ups.

Yeah, she's lucky I'm offering my time for free! It's definitely not in my long term strategy. You're probably farther along in the journey than I am. But right now, that is the value I am bringing to the table.

Thanks for the good wishes, Marvin. Same to you!