'Hood" houses

[Chris&Kez 0]

I have an idea regarding properties like this , tell me if you think I ought to pursue this?

 

Ok, guy called me back about his "home in need of alil lovin'" ( about 5-8K worth as I see it )

He wants me to "just make an offer" says he just plain doesnt want the house.

 

I am yet to discover if there is any reason why .....( guy is a pastor so one would hope he wasnt a shonk )

 

*here's my idea.

Homes in this area of "THE HOOD" are typically worth around 30-45K

this house is rough but liveable.

As I dont wish to 'hangout'' in the neighborhood myself, we have a friend who was born and bred in that part of town and is 'accepted' there.

Yeah, he did some time when he was a youngin' for nickin an old cadillac...but hes a respectable married father of 5 now and quite a nice fellow.

Had the idea of asking him to locate us a TB and 'watchdog' the house for the yr for us in return for $5,000 at close.

 

Thought Id offer pastor $5,000 'as is' for this house on L/O basis, payable at end of 24 months.( but earlier, gives me the edge though)

$0 Down

$ 200 per month.

 

then

 

L/O to TB at $350 per month

+$350 as sec deposit on lease agreement

$500 down as option

100% rent credit

all repairs credited towards end price IF accompanied by recipts

balance due in 12 months

sale price $20,000

positive cash flow $150 per month

 

 

we've walked in with nothing and walked out in 12 months with $10,000

 

and our 'property manager' has walked off with $5K for keeping his eyes and ears open.

[MichaelC 160]

Hi Chris, (or is this Kez?). I think you are complicating this deal more than might be worth for you. Let me explain.

First, I gather this is in a war zone type area. Is this correct? If so, personally, I'd avoid it at all costs. My experience is ugly houses attract ugly tenants, and they just aren't worth the aggravation. But, that's my personal bias, and you didn't ask me for my stinkin' opinion. So, I'll shut up and get back on task here.....

You say area properties are worth between $30K and $45K. That's much too big a spread in that price range. Can you narrow down the FMV of the specific property?

Why have all the additional layers you suggested: a "watchdog", a tenant/buyer, etc. Instead, get it for the best price you can and just assign the deal to someone else. Let them have the risk and aggravation. You get the assignment fee and be done with. There isn't enough money in this to do anything else with it.

And that $10K you are planning on at the backend? Well, what if the option to purchase is not exercised, (very likely, by the way)? You've got nothing to show for your year of toil, and you owe your watchdog $5K.

Assignments, mis amigos, are for deals such as this.

[Chris&Kez 0]

you know, what...you're right of course, another way could be to just assign Ben(watchdog bloke) the contract and let him deal with it.

Better?

[MichaelC 160]

you know, what...you're right of course, another way could be to just assign Ben(watchdog bloke) the contract and let him deal with it.

Better?

Absolutely. Let BigBen deal with the property. You make a quick buck for utilizing some specialized knowledge and some hustle.

[Joseph44 0]

Hi, everyone haven't been on for awhile,just read your post Chris and Kez

Michael C is absolutely right say away from anying thing in a run down section

of town.I'll give you example.My son and I have a rental like you mentioned

apra.at 42000 can't get anybody to buy at 30000.So what we did was a L/o

with a couble for 1yr,we hope we can unload this place with them they were

born and raised within 2 blocks also credit not so hot repo/doublewide 2 yrs

ago.This was 1 home we bought It's our worst nitemare.SO listen to what Michael

C tells you Don't touch it.

 

 

[MichaelC 160]

I've always said, "Ugly properties attract ugly tenants."