I have successfully completed my first transaction. These folks didn’t have good credit. They were one month behind on their land contract and owed around $700 in back taxes. I took my time and did the CMAs and ordered an appraisal of the property.
Their payments were $500 per month on the land contract and their truck payment was around $700 per month, coupled with two other small loans. I let them know I could get ALL their current monthly obligations to $1,000 per month instead of $1,500. The benefit to them is obvious: They are caught up and ALL their contractual obligations are PAID in full.
Dealing with the land contract holder should have been easy, but… I mean all I needed from him was a written payoff, Not his lip service as I refer to as “mind clutter.” First of all, this guy doesn’t know me from anyone! He tells the folks I’m dealing with that I don’t know what I am doing, etc.
We finally arranged a meeting with all of us. I asked him what he would accept for a cash buy-out, knowing full well I have a closing date already set! The amount owed on the land contract was close to $33,000, which I was prepared to pay!
Because of his nasty demeanor and defamatory comments, I had to have some fun. I proposed an offer of $25,000, and I will handle the rest. He said, “Well, I can’t take that but I will split the difference with you.” I didn’t say a word. I simply grabbed my pen and paper and subtracted the difference (which is $4,000 each) and meant he would accept $29,000 for a cash buy out.
I did not say yes or no; I simply drew up the purchase agreement for $27,688, which he signed and must have never checked because we closed that Wednesday without incident. I ended up purchasing the home for $83,000 with the sellers paying closing costs and pre paids.
I needed $4,000 to close, but since my bank statements showed enough money in my checking account, they didn’t verify, and I didn’t put ANY money down. At closing there was a check for nearly $47,000 of which I agreed to pay off these folks other bills (truck balance of $6,500, boat payoff of $1,400, and $5,000 cash to them.
I walked away with $35,000 cash, and they are now leasing the property from me for $1,000 per month! That is a positive cash flow of $450 per month! Not too shabby for my first deal. I really don’t know that much and need to learn more!
I am going to specialize in pre-forclosures and rescuing people out of trailer parks/manufactured home communities. I have sold manufactured, modular homes for about fifteen years and may as well stick with what I know. Thank you for your website, Creative Real Estate Online.