All Forum Posts by: Nuhan Demirkan

Again be open, ask him if it would be OK for you to keep in touch to see if he changed his mind. He'll tell you.

Check podcasts on negotiation. There are many ways you two can come to an agreement. But first you have find out what it is he is interested in. He may want to go to Florida for a month or need a new car, whatever that motivation, if you can help him achieve it you can get yourself a deal. Figure out what it is you want and can you give him what he wants within those parameter. If not check back later to see if things have changed.

This is a long road but the good news is you're heading the right way. You are sure to make mistakes but you are also sure to be successful.

One more thing, don't be seduced by the quick cash of flipping it will only make you rich. Holding assets that appreciate in value will make you wealthy.

Keep it up.

Brandon, congratulations on deciding on pursuing the deal yourself. Developing the skill of negotiating directly with sellers on off-market properties is one of the best skills you can learn in real estate investing. I rarely buy listed properties anymore. There are a couple of ground rules, be honest, be open and be sincere. The deal is not going to happen unless both parties are happy with it. And it is a process. Don't expect a one call close. Keep the dialog going, as long as you two are talking you are in the game. 

Find out if there is motivation on his part to sell. If there is it is a quicker process.

You can contact him thru direct mail, his mailing address should be on the tax records of the property you are interested in. You can call him, ask the neighbors if they have the number. Or you can visit him if they are local. And the reason for your letter, phone call or visit is "I want to buy your property. Will you entertain an offer?"

If you can't cut a deal at first keep in touch at least bi-monthly. Life happens to people everyday. Make sure he has your contact info in case he has get rid of it fast.

The valuation will come from the comps in the area. Look at what other properties are selling for after repair and what the investors are paying for them. Or you can use the formula of ARV (After Repair Value) x 70% = purchase plus rehab cost.

There is a lot of information on Biggerpockets on this topic. Dig in...

Good luck

I'm not sure you can just take out the bullnose and continue with tiling. It looks like drywall above the tile and we usually install tile over a hardie back or concrete board. It is not recommended to instal tile over drywall in a shower.

I'm not sure it is a good idea to advertise the fact that you intentionally sign up and cancel after you've gotten some value out of it. You may want to rethink that strategy. That line of thinking will not serve you well in the long run if you are building a business. There are other ways to get quality FREE education. One such method is called "The Windshield University". There are a ton of information FREE to listen on podcasts. That's where I learn everything I need to run a successful real estate business from wholesaling to landlording to ethics.

Good luck!

You mentioned you bought this on a land contract, did the deed transfer to you yet? If not when will it transfer? If it hasn't transferred you may be able to assign the contract but not sure if you could realize any of the equity since it is not cash flowing. Did you speak with your current tenant? Sounds like he has a few bucks, likes the property therefore might want to buy the property from you. If you have the deed you may be able to do a wrap and get rid of it.

Brad,

Tenant screening to find a quality tenant is the most important aspect of being a landlord. This is where you absolutely do not want to cut corners or compromise. Even if it means going one more month without a tenant. Move on to the next applicant,

Good luck.

I think the numbers are going to change with different rental markets. 

I invest in southern Maryland and the rental market is pretty good here. I pay cash for purchase and rehab costs which ends up around 70% of ARV. Place a tenant in the property and do a cash out re-fi of all my money back (70% to value) with a portfolio lender and the property has to have net cash flow of $500/mo after re-fi.

Right now it is empty, waiting for the rehab to start next week. So, no.

The rental I bought while my son was attending college for $170K cash flowed while he was in school and managing the property. Now that he's long graduated and married we would like to sell it. However, it is only worth $124K. I refinanced it (for $124K) at a better rate to lower my monthly payment and paid off a second for $13K. To sell it on the retail market I would have to spend another $5K+ for paint, carpet and repairs. My total out of pocket expense would be $13K + $5K + $11K (settlement expenses) = $29K. The realtor told me that it might take up to 6 mos to sell, so add another $4,800 in mortgage payments. My thought is to spend the $5K, fix it up and offer it "Rent to Own" at $140K. Take 5% non-refundable down payment ($7K) and rent it at $1200/mo (current mortgage pmts are $825/mo) for 5 years (the option period). Once the house is occupied, assign the contract to a cash buyer for $135K. I would then recover my $18K ($13k+$5K), the buyer would collect $1200 mo x 60 = $72,000 in gross rent and sell it for $140K to the tenant at the end of the term. Plus he/she would take the full depreciation during the option period.

Is that a good enough deal for the cash buyer?

Of course I could keep the property myself for 5 years as well.

What would you do?

Thanks for helping out...

Help me understand this. You're looking to buy a house, using her money, for around $150K that might need $35K in repairs. Total money invested by her is $185K. She wants to make minimum 20% return (which is reasonable) on her cash investment, $185K x 20% = $37K. But she only gets 40% of the total profits , so $37K / .4 = $92,500 total net profit (after the soft costs) from the deal. Is that a reasonable return in your market on a $185K deal?