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$12,000 on a House That Was Given to Me

by Michael Cadden, Romulus, MI   

First of all, let me thank all who are a part of the Creative Real Estate Online community. The success that I have achieved thus far can be directly attributed to the motivation and advice I have obtained since coming to this site a year and a half ago. I attended the Creative Real Estate Online Convention in March 2002. Let me say that it is a must for anyone wanting to invest in real estate.

After coming back from the convention, I quickly started my marketing machine. Within the first month I had negotiated a post-foreclosure purchase of a property worth $130K ARV for $61K. It needed ~$20K in repair. This house is just now going on the market due to a litany of personal problems I had during the course of the year and should sell relatively quickly.

I also picked up a property "subject to" in May. I gave the owner $3K and started paying on the $80K mortgage. I had a tenant/buyer in the property prior to the first payment coming due with $1,500 in non-refundable option money and a positive cash flow of $200/month. The strike price is $109,900 and comes due in May 2003.

Next, I had a lady who was buying a house on land contract, and she also had an investment property on Lake Erie that was in foreclosure. She could not save either due to her poor credit from a failed business venture. I made a deal that I would pay off her land contract if she deeded me the house on Lake Erie.

The land contract house payoff was $67K, which was $40K less than appraised value. I rented the land contract house back to her for a monthly cash flow of $300. Now the good part: The house on Lake Erie went to foreclosure sale. The original loan amount was for $114K and the bank was high bidder at the sale.

I contacted the bank and dealt with them for a few months until I got them to agree to take $72K as payoff. I then found a buyer for $87K. After closing costs, my net profit was $12,200, and I did nothing at all to the house (which needed extensive repairs).

I am ready to kick my business into high gear and am full of excitement. Unfortunately it looks like I might have to go defend my country; I am a member of the Naval Reserves. I look forward, with great anticipation, to the years ahead. I now have a strong belief that I can and will live the dream of financial independence.

Thank you CRE Online and community for helping me get started down the road to my dreams.

 
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