My First Real Estate Investment Deal and What You Can Learn from My First Real Estate Investment Deal and What I Learned from

Each real estate investment deal can be a great opportunity to earn money as well as teach. My first deal was a successful combination of both. It took me eighteen months to decide to make a bet on real property.

My local real estate investor group was able to help me locate this bargain. An investor from Memphis came across a bargain for 3 bedrooms and 2 bathrooms located in a area of moderate or low income that still has a desire to buy houses. It was a wholesale transaction with the other investor and he transferred his contract to me in order to conclude the deal. The property was purchased by me at a price of $58,000. $5,000 went to the investor in order to assign the contract to him. $53,000 was paid directly to the seller. I had cash, so I paid cash for the deal and $4,000 for repairs. The property's after-repair value was 95k.

I decided to lease the property to someone else or do an option to lease. I put up a sign on my backyard with flyers for property. The web page had inside photos of the property. An knowledgeable investor suggested I should sell the property to earn quick cash so that I could move onto the next deal. Being a novice, I was not sure what time it would take for me to find the next good deal, so I was determined to maximize the value of the property. After nearly a month of research and around $800 worth advertisements, I finally found the right tenant . He accepted a $2500 option charge plus the amount of $875 for each calendar month. The total price was $99,000. A $100 fee is added to the purchase price if the tenant is able to pay their rent on the first day of each month. If the property was sold in a hurry, it could have been sold at the sum of $89k. I would have paid $5k in selling costs and made around $20k. Additionally, I would have paid taxes of $7k. Instead , if I pursue a lease option, it might take 2-6 years to sell and I could get a $99k or better selling price and much lower expenses for selling. The property should be worth approximately $35k of which around $5k is tax-deductible as capital gains. Lease option will result in a profit that is double that retailing would have done but it is great to have the cash to make more deals. I'm convinced that the $15,000 profit could have been greater than $30,000 in just a few years, and that's not counting everything else I could have accomplished with the $62,000 cash I invested on the property.

My tenant has not paid rent on time for nine months. Also, he hasn't had a monthly rent credit of $100. On average, he has had to pay $100 more each month for late fees. Though I'm not sure if this tenant will be eligible for refinance, his income and work status has improved over the time they have lived in the house. The value at present of the property is $105k. The father of the tenant is a mortgage broker. should I come to the point of evicting the son the father has told me to let him catch the rent of his son prior to declaring eviction. This aspect is definitely favorable to me.

Lease option leases are excellent to use for humanitarian purposes. I feel as if I'm http://laneefvm612.lowescouponn.com/10-undeniable-reasons-people-hate-house-staging helping someone I wouldn't rent elsewhere. I'll only offer the lease option for one who I believe will improve their credit score and employment situation and should be able buy the house within 24 months. Many mortgage brokers will be able to help you get your tenant refinanced by proving 12 months of regular monthly payments along with copies of the checks.

If the tenant doesnt buy the property within the first two years, I could either lease the option to a different tenant or try to directly to sell the property. Although the property will generate an excellent cash flow, I would prefer to sell it and receive an enormous check and utilize the money when the next deal is made.

Here are a few things I've learned from this project. A yard sign was provided with flyers and links to view photos on a website. Before showing the home inside, we requested potential buyers to view the images online. We had a yard sign in the main local newspaper that brought in 20 times more inquiries as the newspaper. This street was well-trafficked, but other properties that I have seen are less remote had much higher traffic. Always install the yard sign and flyer box and have pics online with excellent descriptions. always emphasize the bathrooms and kitchen. 2. If I had the chance to strike the same deal again, I would have attempted to sell the house as fast as possible. I could have made even more cash by converting the cash into other deals. I believe that any investor who isn't financially secure must first seek out quick income and then move on to longer-term contracts. 3. I might have had to wait an extra day to secure the most reliable tenant. 4. You can not do this type of lease option transaction in Texas currently due to peculiar laws that were approved in 2005. But, I live in Tennessee so there are no anti-investor laws at the state or local level. However, we do have a law that is applicable to trash resulting from evictions, it is not nearly as severe as the others.