My First Deal, maybe...could use some Help!

[ideadealer]

Greetings all..
I could really use some help and I hope this is a place I'll be returning many times in the future I've already read many great things on here.

I've had Carlton Sheets program for over a year, I went through it when I first got it, then for what ever reason never really got started and I took a job in Utah and again I was just working and paying rent again..

Recently, I moved back to St. Petersburg, FL and I’m thinking it's stupid to keep paying rent, so I started looking at the program again and hunting for deals..

I think I understand that there are many ways to buy real estate for people in my situation but I'm trying something that I'm scared to do..with limited funds, 650 credit, not much money and self employed where I don't show much of my income.

Here is the deal I'm trying to put together...

South St. Pete has area's that real estate is growing 2-3 % per month and this house is on the cusp area three blocks north of million dollar homes on the water 2 blocks west of homes selling for 200K and north and east is a bit mixed with smaller later built block homes. The area is truly mixed but I feel it's up and coming and in a few years this could be an awesome area..

The house is a well-built wood and plaster home built in the 20's or 30's on a very large lot, not large enough split off but the biggest on the block.

The property is so overgrown you can't really see the house... inside is very bad with dirty stinking (two big dumb dogs piss and poo everywhere), falling down plaster in some area's no floor in one bath room and it needs at least
20k in internal work and maybe 5-10K in landscaping which much I can do myself but it's truly almost a complete re-hab..It has a later addition that is one huge room and a huge bathroom that could be sanitized enough for me to live and slowly work on the older part of the house.

He was asking 120K but as soon as I met him and saw the inside we were down close to 100 and since then it's more like he'd take 90 but today I went by and presented him with a verbal offer for 80K..

According to the county appraisers web site houses in the area are appraised at 87.5K which I hear is usually low.

He said he owes 40k on a second mortgage and that he'd be willing to carry some paper.

He's the deal I'm trying to structure; he's a very flexible and motivated seller..He just needs about 10K now and maybe a bit in3-5 years and he''l do it.

I offered this,.. I go get a loan for 58K (maybe no doc, maybe higher rate?)
We could pay off his 40K loan the split the 18K that's 9K each in rebates at closing he carry's the remainder 22K at low interest, low payments for 5 years and a balloon payment then, so I can have some money to start work.

He said sounds ok brim him the contract and he’ll look it over. There is also no broker, who gets the commission, or is there any? I think if I brought it he'd sign it, I'm almost positive...

How does this deal sound so far ...?

Any help is appreciated on how I can work this in my favor no money down, money back at closing and a part low interest low payments for 5-year loan from the seller.

What about appraisal and title search before we start, who pays for that… I’ve never been to a closing I’m told I’ll need about 7K there as well..??

Plus maybe I can get another 10k from the hud 203K program and I could have it ready to rent in 6 months..

Please help..

I need my first deal to be a good one, so any comments are welcome..

Thank you.

[WilsonTaylor]

Ideadealer,

It sounds to me like you have a good deal.  It is hard to say for sure.  One word of warning.  A large lot is not necessarily a good feature.  Some people do not want to take care of the larger lot and the people that do want them do not want to pay a premium for them.  That is not a deal killer though.  It sounds like you are on the right track with your offer.  You will need to get some feed back from someone in Florida to find out your next move after you get a contract signed.  If no realtor was involved in the advertising of the property, then no commission is paid.  If you saw a realtors sign and then contacted the seller, then he will still have to pay the realtor.  Always look for the worst house on the block.  It will be easier to make a profit on it.

Wilson

[ideadealer]

Hey Wilson,
Thanks for the reply, I talked with him this morning he's said he needs a bit more then 80K but is willing to hold around 30K with no payments and a ballon in 3 years.

The place is a wreck, really and by the way it's definetly the worst looking house on the block...

I'll keep plugging away and trying to make my first deal, thanks , any and all help is apprecaited...

[Buckeyes]

County tax appraisals are often low, but there is no set rule on that.  What price did he purchase the house for?  That is normally available to you on the county website.  If the house is truly a wreck inside, what are your rehab costs?  It's very easy to dump 20K + into a house, so is it really a good deal even around 80K - maybe, maybe not.  And, finally, just because he "needs" more than 80K now, doesn't mean he still will a month or two or six from now.  If he sits on it long enough, you may end up buying it for 70K, you never know.  You have the right idea though, make your first deal a great one.  It gets easier from there.

Good luck.