All Forum Posts by: John Gamboa

@Andre Lewis, thank you for your service!

Because you are dealing with the seller directly, you have an upper hand compared to the rest of the potential buyers and they may be more flexible on price, terms, or both! If you have good rapport with them, say you're interested in buying the house if you haven't already. 

If you already know you can qualify for a loan or pay cash, let them know you can buy it and cash them out with no problem and see what is the lowest price they can sell the property to you for. I'm not sure how fast you can find out how much you qualify for with a VA loan, but @Jerry Padilla looks like he can hook you up!

Then after they give out a number (you don't want to offer first), find out if they can do better to help you out. Since this is going to be an investment you want to pay the least you can and/or get the best terms you can - low/no down payment, low monthly payment to help cash flow, and some equity going in by getting the lowest price you can in case you want to sell sooner than you want to. Good luck to you.

@Matthew Harrison, What are the numbers? ARV? Repair costs? I'm wondering if it is already a steal at $25k plus closing costs. Does he want the $20k up front or can he wait? If he can wait, it may give you an opportunity to buy with a creative option and more profit than a wholesale especially if the your numbers end up higher than MAO. If you have an opening to explore creative options, find out if you both agree on a price if he's willing to accept payments for his cash/equity until you both cash out when the house is sold.

MAO or Maximum Allowable Offer = .7(ARV)- REPAIR COSTS - WholesaleProfit

@Omid A. and @Ned Carey have great points. What bargaining chips do you need other than that you can help him to stop waiting to get of it? Avoid realtor fees? Get rid of that annoying tax bill?

 LOL - trying to get their post counts up! LOVE IT!

First question. Leverage is a good method of accumulating wealth. Some wealth teachers say pay off the mortgage, others say don't and leverage your assets - get loans. Californians say we can't and don't ever expect to pay off our mortgages. Leveraging multiple income streams to build more income streams is a great plan.

 Second/Third questions. Not exactly sure what you're asking on the second. Could you get approved? I say buy the first one and get that going, save up money if you can while you reno it, keep your credit in great shape, and talk to a mortgage person, or several, as soon as possible to see how you can do what you want to do. They can give you pointers on what you'll need to qualify for more loans. 

Join your local REIA and meet people who have done what you're aspiring to do and ask how they did it. And of course BP is the best resource!

Do you stick to the original plan (pay off ASAP, sell, buy) or leverage out? I've heard of both and both have worked for different people. I think you have time to figure that out. While you are working on the first property, learn as much as you can and develop your strategy and modify as you learn or as things change.

@Dustin Neal, @Matthew Mason...

There's a good explanation on this thread here on BP about the 2% and 50% rule as well as other people giving a lot of excellent info on analyzing buy and holds.

I don't think, personally, that focusing on higher or lower should be a major factor. It's a factor but if you find a good deal, whether be it in a high or lower end area, it's still a good deal.

@Andre Lewis, I agree with @Patrick Ketchum and @Richard Hoppe. It looks like you're dealing with the sellers directly. Or is it listed with a Realtor? If you can deal direct you may be able to buy creatively. I don't know what your closing costs would be where you are. Those have to be considered if you go with seller financing. Are you looking to buy it to live in or as an investment? That makes a difference.

You can use Zillow's recent sales nearby for comps. Don't use the zestimate. Use actual recently SOLD houses similar in size, age, configuration, in the same neighborhood with no major dividing lines in between your house and the comparables - highway, main road, stream, etc.

I spent about 5 minutes on Zillow and searched the last 6 months for sales in Cabot which I assume the house in question is. If not, this may help you find out the comps on your own. There aren't that many recent comps, but I found 2 that may give us an idea. 1123 Hampton Place was built in 2008, but is a 3/2 sold for $91 per square foot. That puts yours at about $175k. 18 Willow Cv sold for the same $91 per sq ft more recently and it's a 4/2 but built in 2004 (older) and a little smaller. If these are near your house then I would use $91 per sq ft, and you're still at $175k. If they want 193k, I'm out. No deal, no way. 

If they are willing to come down lower on the price, closer to what I think the market price is, then it's up to you but buying it as your home vs buying it as an investment are two different things. One is determined by emotion, the other by math.

@John Phippen, There are no stupid questions here and lots of helpful, kind, people. And I've found that there are no stupid questions for some Realtors, especially agents that deal with first time homebuyers or first time investment homebuyers. They are glad to help.

In my opinion, the fact that it's a short sale has little relevance because you're going to submit an offer through an agent just like all the other interested buyers for houses. The bank put the house on the market with a Realtor for a price they want. $51k. Just like a homeowner would when they have a Realtor list their house for sale. 

Plural & "good" offers in means there are offers already submitted either through her or through another agent representing the buyers. Those offers are in the bank's hands to review to see which one they want to accept, counter, or reject. They are most likely within the price range the bank is looking to sell the house for, probably all cash, and probably with little or no contingencies.

If you think there's a chance, go over your deal and numbers, and if you feel good about it, then make the offer. What's the worst that can happen? It gets rejected - NEXT! Find another house to make an offer on.

IMHO - Seller financing, Subject to, Sandwich lease options are all no/low capital transactions although seller finance and subject-to transactions involve closing costs. Check with your local real estate attorney or REIA.

What kind of deal have you struck with the seller? What would your exit strategy be? Find out what your closing costs are and see if you can manage that when the time comes to close.

Depending on your exit you may be able to get the closing costs covered from a buyer and simultaneously close.

@Jo Maxion and @Michael S. thanks for the welcome!

You can call houses for rent ads and see if they'd be willing to lease with an option to buy. If you find one that does for numbers that make sense for you, get it under contract. Do you have an attorney that can go over or create a lease and option contracts when you lease and sublease? You'll want one who's familiar with LO.

Then advertise for finding subleases - Rent to Own, Lease with Option to Buy.