Rehab Lease Options

[Craig 0]

The way the sun is shining brightly on the before picture, and it is dusk in the second, makes the colors on the house (brick and paint) look completely different. I'll be sure to examine things more closely next time before making a comment.

 

Jeff

 

Darn I thought ADAM spent the day with the pressure washer in his hand while on the ladder? oh sorry that was the option money he was holding so tight fisted.

[TPSG, LLC 3]

Adam,

 

So $5K is all this took?

 

Adam, please take a second to explain how (and what) you did all of this exactly for $5 grand.

 

Also explain exactly how you setup each dealing, meaning purchase them and what are your numbers looking.

 

And last, explain what you mean by leveraging the down payment, etc for everyone to learn.

 

Best,

[Adam King (MI) 1]

Christian,

I have a tremendously busy day ahead of me and will try to explain the whole thing tonight. I actually have "two" of these properties right now and need to finish the second one for an open house on Sunday!

I'll post in a while!

Thanks,

Adam

[Adam King (MI) 1]

Adam, please take a second to explain how (and what) you did all of this exactly for $5 grand.

We painted the interior, put in recessed lights, carpet and had it staged.

 

Also explain exactly how you setup each dealing, meaning purchase them and what are your numbers looking.

 

Purchase Price $253,500.00

Appraised Value $350K

Refi at $315K

Lease Option exit strategy

 

Pulled out $46K on the refi after all closing costs

 

And last, explain what you mean by leveraging the down payment, etc for everyone to learn

 

We already made our money. The market is extremely soft here. We decided to give most of the equity to a tenant/buyer. We're using their down payment to cover the loss of our mortgage payment. This house could rent for about $2,500.00 a month. With $20 or $30K down we could make the rent $1,000.00 a month. SUPER attractive to a tenant/buyer.

Billy Sims from the Detroit Lions called on it.

Hope that helps,

Adam

[TPSG, LLC 3]

Adam,

 

Fair enough, thanks.

 

So here's some more questions. Did you do all the work yourself, if not, what work did you sub out and what did it cost you per contractor, etc?

 

Also, regarding the property, how long before you refi'd and what were the terms of the refi (percent LTV, payment per month, etc)? I think it would benefit people to understand what they are able to do with properties besides just hold them in terms of getting money out and then worry about renting them out, etc.

 

I am taking it that you don't mind losing some money every month on the renting since you've already made money and will make money I'm guessing on the option when it's purchased, plus the option money?

 

Thanks and nice work. I'll post my rehab/LO next week.

[CS1977 0]

how long before you refi'd and what were the terms of the refi (percent LTV, payment per month, etc)? I think it would benefit people to understand what they are able to do with properties besides just hold them in terms of getting money out and then worry about renting them out, etc.

 

 

YES--this is extremely crucial for newbies to "get." I for one aren't in the habit of thinking about numbers in different ways simply because I have no examples to go with. This is the kind of stuff I want to wrap my head around because until I do, I feel like I won't be able to approach people with these types off options/scenarios.

 

I've long concluded that buying and holding properties is not for me until later down the road when I have a cash cushion. So I like to hear about these other creative ways of getting cash.

 

Adam?

[TPSG, LLC 3]

Adam,

 

You've got some numbers for everyone yet?

[Jason (AL) 1]

Purchase Price $253,500.00

Appraised Value $350K

Refi at $315K

Lease Option exit strategy

 

Pulled out $46K on the refi after all closing costs

 

 

Sweet deal.

 

You purchased using a $$$ partner, yes?

What was the time span from the purchase price of $253,500

and when you refinanced @ the $315k.

Or did you just purchase for $315k initially and then payoff the seller and/or debts?

 

 

Peace holmes.

[Adam King (MI) 1]

Adam,

 

You've got some numbers for everyone yet?

 

Okay guys/gals. Wait until you see the one I've been busting my butt on!

 

Here's the numbers on this deal. But first, I am honestly thinking about patenting this system. So if you're going to steal it do it quick! LOL I'm kidding of course...

 

$5K down will get you a $2,300 a month rent payment

 

5% down ($17K) will get you a $1,500 a month payment

 

10% down ($35K) will get you a $950 a month payment!

 

All of which is OPTION CONSIDERATION! I.e. you'll be saving about $21K a year going with the last offer.

 

The trick is to pull you equity out, hold the property and offer a TREMEDOUS amount of leverage to a buyer. This is EXACTLY what MC does with his 50% rent credit. And no, I am not trying to steal it from him. I am just trying to work a super win for the buyer in this CRAZY buyer's market. I don't want anyone to pass up this opportunity!

 

Sweet deal.

 

You purchased using a $$$ partner, yes?

What was the time span from the purchase price of $253,500

and when you refinanced @ the $315k.

Or did you just purchase for $315k initially and then payoff the seller and/or debts?

 

We purchased and literally turned around and refied. We had our money in 30 days from the purchase. We did this to avoid the "mortgage fraud" issue. The bank required seasoned and sourcing funds so we couldn't give the buyer (my partner) money back at closing. Instead we did a 100% LTV purchase at the 70% and then refied with full disclosure at 90%. This cost us a few grand by paying two closing costs, but we're sleeping pretty good at night. And yes, there are other lenders that don't require seasoning or "sourcing" of the funds but their interest rates are nuts.

 

And Christine, your 'e right. This is NOT something for the new investor. We need to walk before we can run. The amount of liability on this deal would turn a new investor inside out. There is an incredible amount of experience that was required to not only make the loan, purchase and partnership process work, but to also have newly created exit strategies in place. Hence the topic of this post.

And yes, a portion of the equity is being reinvested.

Regards,

Adam

[Jason (AL) 1]

And yes, a portion of the equity is being reinvested.

 

 

 

 

 

 

...into a fleet of RC cars, I suppose?

[TPSG, LLC 3]

Just got a small bit confused.

 

Your buyer is your "partner"?

 

So just to be clear, you obtained the property through a 100% LTV at 70%? Not sure if I understand that one.

 

Then after you purchased it, you refi'd it at 90%? I'm guessing you had no out of pocket money in this transaction?

 

So you use the actual numbers from the house and put them into your equation:

 

You bought the house for what and how did the loan numbers work.

 

Then you refi'd the house at what exact amount since it was worth what...

 

That would be helpful.