Hey guys, I wanted to share a deal that was closed today, a deal that started well, continued badly, and closed ...
Original publication date on the United States Real Estate Forum on Facebook:
2019-01-30T03:07:57+0000
Hey guys, I wanted to share a deal that was closed today, a deal that started well, went bad, and closed well.
So it started at the end of June, a property in St. Louis that was bought for Flip, $ 143 BUY, 56 REPAIR, 270 SALE.
Comps' average DOM at the time of purchase was 12 days.
The renovation went relatively smoothly, exceeding only a thousand 5 and ended in mid-September.
They are doing sting and putting on the market.
The days pass, and there are hardly any showings, even feedback is not given. Lower prices, and still very few people come to see. Continue to download, and starts a little more movement,
And positive feedbacks.
But we did not get one offer.
After two months came the first proposal, after negotiations is a position on 248, and we got it.
The buyers are speculating, the report is relatively smooth, but the buyers got cold feet and left the contract without giving a reason.
Returning to the market.
It takes another month without any movement.
We decide to lower the property from the market and wait for a better period.
At that time, I said we must try another exit strategy.
We did not want to rent the house as a regular carnet, fearing that the tenants would not keep the house so that we could sell it as easily as that and so long when we wanted to.
So we decided to offer the house in the Rent-to-Own model, also known as the Lease-option
It is important to understand that the house is located in a relatively prestigious area of St. Louis, but not the High End, and that the District District is really excellent.
In this area, almost all of them are homeowners, and there are really quite a few properties offered for rent, let alone Liss Offshane.
So I said we'll make an attempt, at most he will not go, and in the spring we will return the property to the market.
Within two weeks today we have over 10 hire-interested buyers, under these conditions:
1. A non-refundable (non-refundable) 18,200 payment
2. Monthly rent 1,900 dollars for two years
3. Buy price 280,000 in two years (or less)
4. All repairs up to the height of 1500 per month are made at the expense of renters-buyers.
Some numbers:
If the tenants do not exercise the option, the average annual yield will be 11.5
If the option is exercised in 280, the yield will be approx
The average annual jump to 24 percent.
Another important advantage: no speculation, no brokerage fee, no other headaches involved in selling Flip.
Much simpler than I thought.
It was the story of the flapping, but we managed to get out of it quite well.
I'll update for two more years what happened?
Good night,
light
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sounds great..
Mor Levi
Light - How did you calculate the return? How much do you have left each month from the rent? What to consider?
Oh light, well done for resourcefulness and creativity, is a real lesson for all of us. ??
Nadav Doron
Niv Avni
Think outside the box 🙂
What fun to read! Well done. Mortgages of all their shades are ultimately the best and most profitable. From now on after you fall in love every transaction will be like this.
?
This is exactly what we have done to the asset that has been "cut off" without a sale. We found someone who really loved the house and had money to buy the house in cash that day, but he wanted to buy the property through a mortgage and before that he wanted to live in it for a while.
We gave him a one-year option to buy the property, a 10% down payment, a rent of $1500 and an additional $1000 every month (which will be earned in the sale - rent credit).
Can say that it was an excellent deal and this year (he bought a year ago) the yield on the property was 25%.
By the way, this is one of our sales plans in Flip's houses.
Well done?
Champion
Nice!
Can you share the address or the neighborhood?
I do not know what your case is, but if the 200 (buy + renovation) is investment money from home and the plans before were to continue with flips, it ruins the plans a bit and requires reassessments with financing or investors etc.… It was not worth lowering the price a bit and continue with the plans ( Again trying to draw a general conclusion if the money did not come from funding and should be in future use of flips…)
Creative and interesting, inhale?
Jacob Sapoj
Breathe!
Stunning.
Excellent, I wonder if he would have worked in Israel. By the way, I would be happy to explain the calculation of the return.
Miriam Schory
Totally champions
Yafit Levin
Stunning! Champions
Tal Nahmany
Champion
Stunning! Make a cup of pistachio! The selling price in such a program is significantly higher than the current market price? Offering at 280 thousand dollars. Can you refine more about the program? If purchasers can not buy now, how can they buy another two years? The goal in the meantime will build credit and employment history? What monthly rent would you receive under market conditions? How is the down payment calculated? Thanks