All Forum Posts by: Nuhan Demirkan

Keela, one of the first things I did when I started my investing is to get my own license. I've had it since then. I am really happy that I did. I can look at homes in my own time, do my own research, write my own contracts and negotiate my own deals. I don't use my license for anybody else. It is simply for my business. I have a broker who understands and never bothers me as long as I make my quarterly payments ($75/qtr.) Total annual cost to me is around $1500.00 with insurance, fees and dues. May want to look in to it.

I had to go to a portfolio lender on my last property. The terms were 5.25% with 5 year ARM, 25 years amortization and 10 year balloon (which could be extended). But, they gave me the cash I wanted. It is a little bit more expensive than conventional mortgage but still doable. My bank does not escrow the taxes and insurance. Check with yours and include those numbers when figuring cash flow.

Good luck,

Rent to own does make sense since they are upside down on the value. They could do a 5 year buyout with minimal down payment ($5000 to pay for the repairs they need to make). Hopefully, in 5 years, the house will be worth wore than the mortgage. It will also give them a tenant who will look after the house since they will own it.

Another option is you could purchase the property subject to the existing mortgage. Take the deed but keep the existing mortgage in place. Rent it out and pay down the mortgage. If the seller agrees to 3 to 5 year buyout, you might have the equity you are looking for. If you don't want the property at the end of the term, sell it, pay off the mortgage and keep the equity.

You are putting down $15K cash as down payment plus the settlement fees. Do you need to do any rehab? if so what is the cost of that? If the settlement fees were around $3K, total cash required would be $18K plus any rehab (paint, carpet, etc.) If the projected annual return is $2K, your cash on cash return is 11% at $18K. It would take 9 years to get your money back. I personally would want more than 11% return on my cash. But you know your situation better. Good luck with investment.

Thank you Tj,
any advice on how to structure the contract with the seller or the assignment document with the end buyer?

Nikhil,

The facts are: you will be putting down 20% cash out of pocket, plus paying 66% of the monthly payments at 10.40% interest for the foreseeable future.

The hope is maybe, at some point in the future, the appreciation will outpace the money you are paying. And the truth is it may not be appreciating. Your money could be losing its value which will appear as appreciation.

What you're considering is not investing it is speculating. You can get in trouble as we did here in the US.

Personally I would not do this deal. Move on to another property that is going to pay you a healthy return every month for your hard earned money and effort.

Good luck in your investing.

Hello fellow Marylander, it is always nice to see folks from my area.

First I would find out if there is urgency to sell. From what you wrote it doesn't seem like it. They haven't lowered the price yet.

Second, do I know a cash buyer who could take down a house in that price range

If the answer to these questions are positive then I would work the numbers and make a run at it. Disclose everything.

Life happens to everybody. You never know until you try.

Tom, thank you for your response. I am a cash flow investor first and foremost. But I'm running out of cash. I was thinking about building my cash reserves using the wholesaling strategy. Trying to get around the existing tenant issue.

I am doing marketing to absentee owners. Getting pretty good responses. But most of the responses are from tired landlords who have tenants in the property. Some pay their rent others are late. How do I get my deal flow to close 2 to 3 wholesale deals a month if I have to deal with the tenants in place. Most of these have month to month leases. Is it just a matter of having enough of them in the pipeline so I can move the tenant out (which may take a few months) and wholesale the property to cash buyer? And do I write the contract to reflect the time it takes to move the tenant out? I am willing to do cash for keys (within reason) if necessary. Are there other ways of getting these tenants out or structuring the deal so I can flip these properties quicker?

there is a group that meets in LaPlata once a month on 3rd Tuesdays. I will let you know when the next one is scheduled.