Another No Money Down Deal

Here is another example of a no money down deal. There was a foreclosed duplex listed with one of the local real estate companies. the tax assessed value was $88,900 and the property sol.d 2 years ago for $90,000 The bank that owned the property had an asking price of $69,900. The listing went by for about 2 weeks, then they dropped the price to $59,900 where it sat for about 2 months, then they dropped the price to $47,900. The duplex was built in 2001 which made it about 7 years old and t was actually in pretty good shape. It needed a little bit, but not that much. The duplex was sitting vacant, because it was a foreclosure, so it was not producing an income. The property would be more valuable if it was producing an income. I made an offer of $38,000 and we ended up agreeing to a $40,000 purchase price.

CLICK HERE TO SEE PICTURES OF THE DUPLEX

Since the tax assessed value was $88,900 and I was getting it so below value, and the fact that I have built up my relationship with my local bank, they agreed to give me a loan for $50,000.
So when we closed I got a check back for about $9700. I spent $650 for someone to go in and clean, repair and paint one side of the duplex. I then rented out the 2 bedroom side for $500 a month and then the 3 bedroom side for $525 a month. My payment to the bank was $387 a month. It would have been a good positive cashflow property, but I try not to do any more landlording deals. I don't like dealing with tenants. I am more of a get in and get out type investor now, so I put it on ebay and sold the duplex for $60,500. Which paid off my loan at the bank and gave me a check for $9600.
By the way, I only had this property for 3 months, so by borrowing the money and paying it back so quickly, the bank has earned more trust in me and next time I go in and ask for some money, to do a no money down they are more likely to give it to me!
I never went and dealt with any tenants during this deal either, because I got all of the property management taken care of by a management firm. The collected rent and dealt with tenants, so I did not have to while I owned it, but you have to be careful, because some of those management companies can be rip offs too!
I just had the vision to see that a vacant income producing property is less valuable than a turn key investment that is producing an income.

Anyway, I do deals like this all the time.

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