Private mortgage case study!
(click on image to enlarge)
"A great place to start."
Statistics
- $13,000 purchase price
- $5,500 private money
- $7,000 rehab costs
- $37,500 value
Description
I found a little fixer upper that was a FSBO being offered for $23,000 (don’t you love the prices in small town america).
The owner was desperate to sell and accepted my offer of $13,000, with no counteroffer. The best part was that the house had a private mortgage on it with a balance of $7,500 that the noteholder allowed me to assume-and it only had 48 months of $196 per month payments! I took $5,500 of my own money and closed the deal. Over the next couple of months, I went to work (mostly on weekends) fixing up the place and spent about $7,000 in the process. After the repairs were completed, I had the house appraised and it came in at $37,500. Had I sold the property at that point, I would have pocketed a net profit of about $10,000. Instead, I rented out the property for $480 per month (giving me $284 per month positive cash flow) and paid the property off over the next two years. Four years later, I had a free and clear property worth about $40,000, plus I pocketed about $13,500 in positive cash flow- a great deal for the first-time investor.
Comments
dempsey writes: (June 16, 2007)
Great Job !!! Where are you guys buying these houses for 13,000. I cant buy a parking spot in Boston for that.
norcal writes: (August 20, 2007)
How dose this happen? 13,000?
suzushiikaze writes: (August 29, 2007)
I want one, I want one, I want one where are they?
phillip writes: (November 03, 2007)
I have a similar story. Saw 2 bdrm, 1 bath condo listed on www.realtor.com four years ago. Was listed for $14,400. Flew there to take a look. Price fell to $9,900 by the time I got there. Turned out to be 2 bdrm, 1 bath, hardwood floors, huge living and dining room with built-in glass and wood cabinets, wood trimmed windows, two fireplaces, balcony and breakfast nook. It’s gorgeous, though in a transitional neighborhood. Just got back from Indianapolis where there are bargains as well. Anywhere in the mid-west (Missouri, Ohio, Illinois,Kansas, etc.) you can still get properties for less than $10,000. Detroit and surrounding cities are giving properties away because markets are so depressed. But 20 years from now, who knows – these areas will probably blow up. May have to fix up, but for now, there are still bargains to be had. Good luck everyone!!!
woodhouse08 writes: (January 20, 2008)
Cute House!~ i bought a house on Bargain network .com for 15 k in PA there are alot of inexpensive houses there , i want to buy more~
Log in to discuss this pad. No account yet? Sign up here.