I have completed my first creative real estate investment, and I am very grateful to all of you as I have learned so much from the site. Here is the outline of the deal…
I bought a 4-unit building in Northern New Hampshire. It was fully occupied, and the agreed sale price was $34,900. An investor gave me 10% to put down. I had a lender lined up to do the original deal, but hit a snag with my investor’s credit.
We bought some time in dealing because of the home inspection and obtained cash advances from credit lines to fund purchase. Went back to lender to refinance on my credit alone, and the appraisal came in in at $44,000. They would loan 90% (39,600).
I financed that amount, which allowed me to pay back the investor and recover the closing costs and put $2,500 in my pocket. In addition, the seller gave me $2,000 cash at close for future repairs to the property (estimate $1,500 will need to do them in about 2 years).
The property yields me about $400 per month positive cash flow. The only cash I had to outlay was for the home inspection, but on a net basis I ended up with $2,200 extra dollars in my bank account; more, if you count the cash for repairs. If you look at profit then the following comes into play 44,000 – 34,900 = $9,000.
I would specifically like to thank for his input and explanation of the money game and Jennifer (NH), who offered much great advice and many good leads. In addition, the wealth of knowledge I gained here has helped me to learn a lot about all aspects of real estate investing. I intend to do this for a long time, and I hope that we can keep the information flow into the site. Now, on to the next deals.
I want to add one more thing. Persistence is the key here. In pursuing this deal, I spoke to 13 different lenders (10 rejected the deal and two wanted outrageous costs) and, at least in the initial stages, it appeared that the deal would not fly. Your help and ideas were what made this happen.
To all newbies out there, you need to realize that the only thing that will kill a deal is you. I also want you to know that I called on approximately 30 properties before this one came about. It would have been easy to get discouraged, but you need to hold true to yourself and to your goals. Remember why you want to do this and everything will be okay.
Ever so grateful, Rob Day (NH)