Pop Quiz

[ctguy]

How would you buy this property, be as creative as you can:
FMV and comps at 179,000
an underlying mortgage of 179,000
1500 PITI
no prepayment penalty, needs no repairs.

Good Luck

[andviv13]

I wouldn't buy that one.

[ctguy]

Most people wouldn't, but there is a deal in it. Get creative.

[Swirlaze]

..

[ctguy]

Are you saying you would buy it sub 2 and lease option it to an end buyer for 190?
Maybe take 3% non refundable down? Maybe charge 1700 a month for a 3 year lease term? End up with 7200 in payments over 3yrs and 10,000 deposit for gross profit of 17,200?

Or would you pay cash at 100%?

Might be tough, the high end of the comps are 180?

[Swirlaze]

..

[propertymanager]

Here's the real question.  Why would anyone in their right mind pay full market price for a property?  You can buy ANY house on the market for full market value.  Do even the slightest amount of work and you could buy one below market!!!

That's the real answer!

Mike

[ctguy]

Mike, it's just an exercise. Do you not have any ideas? At the very least, why leave money on the table? If you can make a buck, then why not?

Swirlaze, you would get a purchase option? Not a bad idea, you'd only have marketing costs.

[propertymanager]

ctguy,

Yes, I do have an idea.  My idea is that it is foolish to pay market price when with any effort at all, you could do better.  So, why would you throw away money by paying more than necessary?  That's the real question!

Mike

[ctguy]

How would you do better with this property? Do you think the bank would do a short sale, or maybe sell the note? Assuming, of course that the loan was never delinquent.
How could you get a better price?

[Swirlaze]

..

[propertymanager]

Swirlaze,

It doesn't matter whether you're holding the property for a rental, doing a flip, rehabbing and then selling retail or what you're doing.  If you want to buy retail, you could pin the real estate section of the newspaper on the wall and throw a dart at it.  Any listing that the dart hit would be a retail deal, like this one.  Why take a bad deal and try to turn it into something (which has a high probability of failure), when there are plenty of real deals out there?

Mike

[ctguy]

Its a hypathetical question guys. How do you buy retail and still make money?
I've done it with free and clear houses, I've done it where there's equity, but how would you do it at 100% financed? If you don't have any ideas, that's fine. But it doesn't mean it can't be done.

I don't think of this deal as retail, I think of it as over leveraged.

Imagine if you could throw a dart at the real estate section ad make 30-60 grand with each throw?

[Swirlaze]

..

[John_in_NC]

ctguy,

Yes, I do have an idea.  My idea is that it is foolish to pay market price when with any effort at all, you could do better.  So, why would you throw away money by paying more than necessary?  That's the real question!

Mike

Hey mike how do you buy your properties?