My First Deal
I am looking to do my first deal and I wanted to get some peoples input before I went ahead with it, just to make sure I am not missing anything...
The property is in a small town in Ohio and was appraised at 40k. It has a renter in it now who has been there well over a year so she does not currently have a long term lease with the current owner (it is month to month). They are willing to sell the home to me for 25k (owner financed at 7%). The renter is currently paying $400 a month. The renter is only occupying the downstairs of the home, the upstairs needs some rehab (5k should be more than enough). So there is a possibility for a higher rent once the upstairs is finished...
I am going to be asking the owner for the accounting records for the home. Is there anything else I should be asking for or checking into? I have known the current owner for a long time and trust everything they are telling me (they are trying to help me get started), but I still want to do my due diligence...
Please let me know if you have any questions! Thanks in advance!!
--Jon
ask if he will be giving you a warranty deed or qc, and ask if he has title insurance, dont want no liens to be attached to the property and you liable for it...
Also get a home inspector in....
Check with the county building code enforcement folks to see if there are any code violations that would prohibit your getting a certificate of occupancy.
Its unreal that there are parts of this country that something can appraise at 40k...Where i live you have a better chance in see god..This is in the whole state
yes, well higher priced houses mean higher profits.
you buy a 40k house at 80% L.T.V. = 32K purchase price
you buy a 200k house at 80% L.T.V. = 160k purchase price
you only make 8k on the 40k house were-as you make 40k the other, thats a big difference, and i wont even get into the higher priced houses, but my point is the more expensive you house the bigger the discount and bigger profits.
i am considering math as my next profession. lol
Thank you all for the information!! I am planning on making a decision soon, I will keep you posted!
--Jon