DanielSun

yeah, this decision has a lot to do with my personality as well. some people can better manage themselves, others like me need to create the environment

that's sound advice

Hey Guys, where do you run your business? I've been fooling around at home way too much. I am currently working in my "home office", while my wife and child is playing in the next room. It has not been as productive as I had hoped. After much consideration, I think it's time for me to take a big step forward ------ rent an office, hire some VA and sales people!! It will be a trail period of 2 months to start, and it will be an intense 2-months. Either I succeed, or I will weep shamefully with pride at my failed but courageous undertaking. (it's ironic i know) I intend to do this as a business not a job, so it's time to start running a business!

Hi Mipopa, do you really look like your profile pic? if so, then you got a better start in this business than I did.

lol I learned something that amazes me 1 month ago I contracted a townhouse in a good area, the townhouse needs about $5000 of cosmetic work, but I thought this is a $350k house selling at a good price, good term, nobody would mind the minor repairs. I brought probably 15 families to see it, nobody wanted it. I ended up cancel the agreement. This house near the lake has a beautiful surrounding, but the current tenant in there is no cooperating. He won't show the house to anyone else. Long story. But I had 2 families drive by the house, saw how beautiful the surrounding is, and they both want the house without seeing inside!! lol

It's 24 months. I always do at least 24 months, won't even touch 12 months. Thanks michael

I am selling it for less because...well at first I was just trying to get this done quickly so I priced good. This property is 1 hour away drive from where I am so I didn't want to do a lot of work. soon I realized I priced it low, but I have already advertised the price to the buyers. the average price on the same area is 30k higher!! So it all comes down to my laziness. The owner is not willing to extend the lease, he lives 3 hours away from this! and thats the only reason he wants to get rid of it. I will advise them to see some brokers.

I currently contracted a beautiful house available for rent to own near a lake, i am selling it for 20k less than what it could be worth, and I am kicking myself for it Here comes a family, with 10k downpayment, and their income can support the rent, but somewhat shy of affording the house. (rent is $1700, but to own this need to afford a monthly mortgage of roughly $2100) I know this, but they want it bad. So what would you do?

I am taking some interest in commercial real estate, anyone here do that? Recently I come across a seller who wants to sell his 900 sq feet Condo office in a building, He was using it for his own business. so I've done some research, Edit: initially i asked to do a lease option about this, but after checking the price and all a lease option doesn't really offer that much incentive. The property value hasn't changed in 8 years. The building is in good condition. the area vacancy for office is 6% to 9%. The maintenance cost is $151 x 12 = $1800 the market rent is $1200 + utilities x 12 = 14,400 it looks pretty simple from the surface, so assume 10% vacancy I should expect $13000 gross rent, subtract maintenance cost let's say I should get $11,000 net rent right? of course nothing is always as simple as it looks, so what am i missing? What other cost should I consider? If I offer $110,000 that would give me 10% return. hmm seem like a tempting starting project. It's not investment grade but I'd still consider it a good income property to hold. Since residential property in the area won't ever get this.

After careful consideration, I've decided that it is way too much trouble to get this done and the lease back is just too confusing as you guys say. I am waiting to see if they would consider move out then ask to sign another agreement.

I don't understand, why am I paying retail? The house is $430,000 at least after repair, and in total it would cost $355,000 to get it fixed up and done. I expect them not to pay, and I want them not to pay. That's why I made them understand if they do that they will lose the house right away. I will not wait for 2 years. If taking the tenant out of this situation, let's just say it's a house need repair, then I can absolutely assign this to some buyer in 1 or 2 days. In Ontario there is no such thing as short sale. The bank always sell house at market value, because there are so much demand. This house was listed at $389,000 on MLS, and there were tons of calls about it. House here doesn't need to be 30% below market to get a wholesale buyer. There are people asking me to find 10% below market homes. I want to find out exactly how much is their monthly payment right now, and exactly how much it will cost to repair the place, because I don't know, I feel something is there. I agree leasing it back to them is trouble. the way i see it, if it's really bad, nobody will fund it right? Then I would know it's a bad deal

I came across a family who is losing their house, they make good income, but their mortgage is at default. Their story is they got scammed by the mortgage broker and is paying very high interest rate. So they want to sell their house to me, and let me do a rent to own back to them. I took a look at the house and the biggest problem with the house is the family living in there. It's so messy, and needs repair everywhere. The only way they will contract the house to me is if I do a lease to own back to them. so, the break down is approximately this: House ARV: $430,000 Repair needed: $30,000 Contract price: $325,000. And I agreed to lease it back to them for $365,000, term 2 years. I told them if they miss on payment or cannot repair credit by then, I won't sell it back to them. But in my mind I know most likely they will just screw up again, and they will not make the house better. I have no problem if they actually back out and move away peacefully, because then I can surely win on this. if they do buy it back then I wouldn't need to do any work on it. Overall I think it's a doable deal, or at least there are ways to make it work. I don't want to assign this deal, I don't mind actually find someone who can fund this, or can partner up with me on this. I just don't know if the risk is worth it. Any comments?http://s1075.photobucket.com/user/zerggross/slideshow/32%20Bristol%20Ave

yeah, that's what it means. For a fixed-rate mortgage, you get penalty if you pay it off early. Now that I think about it, it's kinda crazy. Wait wait, it's not like that in the states?

hmm I thought I had replied this but it wasn't posted. Anyways, the normal cost of breaking a mortgage term is about 3%. So on a $400,000 balance it would be around $12000. However some people seem to have higher penalty, like the owner I spoke to seem to have around 5% penalty. I don't know the details or the rules regarding these mortgage terms, but sometimes it can be very costly.

I never dared to put the "I will cover your closing cost" sentense into my pitch or contract. Just breaking their mortgage alone could cost me 5k to 20k in my area. Yesterday I spoke to a seller who is considering lease option because her mortgage penalty would be 17k. You actually gonna pay that?

Thanks Michael. The reason I want him to take off listing is mainly because I don't want people to see the price he is selling at. I am going to charge a higher price with rent to own, and I can do that because the market support it. But if people start to see the price he is listed at (which is a bargain), it will turn away many potential tennat buyers.

I've come across a seller who has a beautiful little house, fully renovated, priced right. The house is only on market for 2 weeks, but because of his payment problem he needs something done right away, either sell it or rent it. And there was a house opposite of his that took 70 days to sell and that scares him. So rent to own came as a good option to him. He is not willing to cancel the listing, without me actually having 1 buyer already. But if I can pay his first month rent, he would take the listing off and let me show potential tenant buyers. I know for sure this house would sell, but should I take the risk and pay up one month rent? It's about $2300, the potential profit on this is about $8000 to $11000.

was those from FSBO? or FRBO? what are the comparables? How much rent are you asking for those?

I'm actually interested in hearing how you got those 2 contracts. Are they sold? What are the numbers look like. Care to share?

You don't know the fair value and you forgot his asking price, how serious are you? Getting an agent to negotiate for you? What!? That's just laziness. It may be scarry to go out and negotiate and you may suck at it, but if you want to get something done, get out of your comfort zone. There are many investors starts out sick with nervousness and butterflies in their stomach, but the ones pull through will succeed.

yeah i know, but then I have to pay the homeowner. I wonder if there is a payment service that can just divide the checks from the tenant, a portion goes to me and another portion goes to homeowner.

Speaking of that, do you use a company to do payment for you? Or do you just get post dated checks from tenants, and give post dated checks to the seller?

I will just hijack this post and use it for chatting. 'cause I ain't laying low. First 2 months of doing R.E. investing has not been smooth for me. I had a deal where I already found a tenant buyer who is going to pay me $10k and ready to sign, only to find out the owner signed a lease with someone just a day before. However I found a pretty good sandwich deal, my first one, made some mistakes but it will work. I repeatedly make one same mistake: keep going to see houses only to find out the owner is thinking of something different than what I proposed. And I lost a couple deals because I talked too much. There are ups and downs, but I am sure this would work for me, and it can only get better.

The rental market here is pretty hot, if a 1500sq feet single family house is renting under $2000 it will be gone in a week.

I also have a lot of trouble finding good deals, may consider expanding into surrounding smaller city as well. Or I could just start doing bad deals, where the prices are super jacked up, heck I might just try that, since the houses are gone so fast these days in Ontario. The average detached house in Toronto sells for 650k, and still it's hard to find a deal where i can make 10k.