OfflineWe just signed a sales contract on a rental of ours:
we bought this house in May, 2010 for 41,500 & paid cash from our HEL.
We entered into a 2 yr. lease option with our tenant-buyer; they gave us a 10,000 non-refundable deposit toward the purchase price of 68,000. Their rent
was 700 per month & we would give them a 100 per month rental credit also going toward the purchase price of the house(2400).
At the end of the term the tenant buyer was going to purchase the house using a USDA loan; they were approved for 62,000 and had planned on rolling their closing costs into the mortgage.
Sadly the house would not appraise that high, so Jill & I deceided to drop the purchase price down to 50K instead of the 58K owed. Since they did not have the closing costs, they did not exercise their option to purchase. They did ask to stay as regular month to month tenants at 625 per month. We agreed.
Due to my illnesses over the past 1.5 yrs & being faced with thousands of dollars of medical bills, we elected to sell the property to them for 46,000.
So this deal will result in the following profit : 46K - 41.5K = 4500; + 10K non-refundable deposit; + positive cash flow made from rent; 1st yr. =
6600; 2nd yr. = 6000; 10 months(until closing date) =
4900; = 17.5K Net Rental Income ... 4.5K + 10K + 17.5K=
$ 32,000 Total Profit ... Using BOA's money from our HEL; BTW, BOA is charging us 2.74% APR. So, 41,500 X .0074863%(daily rate) X 1020 days(days of borrowed money)=$ 3168.95(cost of borrowed money). $ 32,000 -
$ 3168.95 = $ 28,831.05 Net Profit from this Property.
Not Bad for using none of our own money & not doing anything to this house!!!
Gary & Jill Sell a Rental, Making 32K Profit !
Posted on: Wed, 01/30/2013 - 03:07
Gary & Jill Sell a Rental, Making 32K Profit !
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- by gceriani
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Hi Gary and Jill
I am new as an investor reading Dean's books as we speak great for not using none of your own money but can you please explain to me what is the acronyms BOA'S, HEL, BTW? I am trying to put together my first deal in order to see a profit very impressed on your profits. Can you please give me some advice?
BOA- Bank of America
HEL- Home Equity Loan or Home Equity Line of Credit (You will also sometimes see it referred to as HELOC)
BTW- By the way
"You're never too old to be what you were meant to be!"
www.deangraziosi.com/real-estate-forums/investing-journals/59128/day-for...
"Shining Like a Star & Dancing on Sunshine"
"Shoot for the moon! Even if you fall short, you'll still land among the stars!"
Our Expert Karen always has all the right answers!
Another good example of using OPM.I really enjoy reading your posts.
Congratulations
Love these kind of deals
Congratulations Gary and Jill!
www.tw4homes.com website
https://tvallc.isrefer.com/go/RehabLite/reigirl/ FREE SOFTWARE FOR WHOLESALERS, REHABBERS AND AGENTS! Present professional looking deals to buyers and lenders as well as run your numbers and get the ROI.
I wasn't trying to step on your toes. I knew that according to the time I saw this that you were probably off for the night so I just wanted her to have the info right away.
Karen
"You're never too old to be what you were meant to be!"
www.deangraziosi.com/real-estate-forums/investing-journals/59128/day-for...
"Shining Like a Star & Dancing on Sunshine"
"Shoot for the moon! Even if you fall short, you'll still land among the stars!"
Thanks Karen for helping Annie. I would never take it as "stepping on toes"; afterall, the whole idea of this website is to help people out and with all of your experience here, you always come thru! Thanks again, Gary
I remember how hard it was when I first started and how frustrating it could be.
I try to help as much as I can, but sometimes I post so much that I fear that I am walking the fine line of over exposure.
Thanks for your response.
Karen
"You're never too old to be what you were meant to be!"
www.deangraziosi.com/real-estate-forums/investing-journals/59128/day-for...
"Shining Like a Star & Dancing on Sunshine"
"Shoot for the moon! Even if you fall short, you'll still land among the stars!"
It's nice to hear how you made this deal work for you! Sorry to hear about your illness and the bills, but as DG says, isn't it nice when you can write that check?!
Looking forward to hearing about many more of your great deals!
@anniem: you may want to check out the link below to a thread of REI terminology...
http://www.deangraziosi.com/node/3208
Valerie
“And will you succeed? Yes indeed, yes indeed! Ninety-eight and three-quarters percent guaranteed!” ― Dr. Seuss
"I believe in angels, the kind that heaven sends; I am surrounded by angels, but I call them friends" - Unknown
My journal: http://www.deangraziosi.com/real-estate-forums/investing-journals/59110/...
Thanks Anthony, OPM is the only way to go! Glad you enjoy the posts.
Congratulations! Happy it all it all worked out for you!
Thanks Mike, appreciate it.
Thank you for your support Tammy.
Karen I don't think you're over-exposed with all the posts ... I think you just have a vast backround!
Thanks Valerie for your concern, & while it's true that is nice to able to write a check to solve a problem; I wish the feakin' doctors could solve the problem. I know when I owned the oil company, if we couldn't fix something
we didn't get paid!
Thanks Dave & Cheryl