[Jim Cattedra]

Jim Cattedra

Jack,
your ablity to throw out solutions is just like turning on a faucet. We expect this web site to be a goldmine of learning.

We are now investing in 4 states.

I just purchased a house in Texas for $45K, the repair is $20K, and the ARV comps run $110 to $90 K. My Realtor offered to buy my contract twice, at $5K and $10K,after
my purchase my Realtor lined up a lease buyer for a $113K sales price, with a lease payment of $900 per month. The buyer needs credit repair for a year. The house is in an unincorprated open zoned, eclectic area, three miles from a desireable town with good schools.

BIG QUESTION THIS WEEK IS: Should I go ahead with the fix up, lease to the potenial buyer in expectation of a sale at 113K? Or should I offer to sell the house to my realtor for 65K AS IS, and get out of town?
Out of state fix up and leasing can become costly.

Any advice is really appreciated. What are better ways to set up the lease and eventual sale in Texas?

Thank You
Jim Cattedra
[email protected]

P.S. The house is wood frame on piers in Galveston county where insurance is higher. I paid out of pocket cash for the house. I will pay out of pocket cash for the repairs. I like banks to be at risk, it is 12 miles to the Gulf, but I did not have time to get a loan. Should I get a loan after repair and prior to selling to the renter/buyer in a year? This would free up my cash, and I could wrap with an AITD for the sale if that could be another profit source?

[Anonymous]

Anonymous

James,

It’s going to be a few weeks before Jack gets back online. He’s on his way to Alaska now and then has another trip planned.

There’s a way for you to have your cake and eat it too on this deal.

Sell the house to the realtor with $5,000 down and you finance the purchase and fix up cost in exchange for 50% of the upside. Equity participation financing!

If the buyer needs a whole year to get financing, I would be nervous. There’s no telling what the finacing options will be in a year. You need to get a better buyer.

Benefits to you:
You get $5,000 upfront.
You don’t have to deal with fix up and selling long distance
You get 50% of the profit.
relationship building
realtor is right there to keep an eye on things.
control costs because it is determined up front.

Benefits to the realtor:
they get a great deal
don’t have to find the money to buy
don’t have to find the money to fix up
don’t have to make payments on a vacant house
knows that you’ll do it again if they find another deal

Everyone wins!

Jackie

p.s. You should also know that the lease option laws have drastically changed in Texas. If the tenant buyer does not get financing within 6 months, you could have to give back all their money. So you need to structure it a different way with the buyer.