Is this a good deal?

[jhoper]

I have been working the phones and letters and the system we were taught in the Ron Legrand workshop back in October.

I have had a few deals come and go but have not been able to close any of them as I have been learning this whole time. Things seem to be falling into place for me and so are the deals. So with this said I have a deal in front of me that I need to table to everyone to get some feed back.

It is a single family home in Grande Prairie, 3 bed 2 bath 3 level split. Spoke with my realtor and it is worth 245-250. The sellers has agreed to let me wrap his mortgage which is $216,000 ($1003/m PIT) at prime -.75% with 3.5 years left. He would like $25,000 cash to close. I have already told him this is way to much and he seems willing to move a little.

My current portfolio has roughly 90 properties in it within the GP area. I was thinking a couple of different option for this.

1) buy this house and do a lease to own (get $30,000 deposit)
2) buy the house and then rent it out (if I were to do this I would sell one of my 90 to bank some cash but I would be keeping my total $$ of assets the same)

Is this the right thinking or is this del not worth the look? It is 6 years old, in a good area of GP, hardwood floors and nice yard. It would rent easy and show well.

What is the thoughts from the folks who have done RL deals already?

 

[JimWhitelaw]

Jared, a few thoughts that spring to mind:

1) $30K for a LTO deposit on a $250K house is probably unrealistic.
2) If you sell once of yours and buy this, you`ll possibly trigger capital gains on the existing property. For sure, you`ll pay a bunch of legal fees to end up in approximately the same position.

I`m not seeing the motivation for this deal. Something that Tony Peters has stressed to me is that for these kinds of deals to work you need either a)equity or b)terms. Doesn`t look like this seller is offering you much of either. The deal he`s proposed to you now is better for him than he could do with a realtor, but there`s no win for you in it...

Could you buy via AFS, rent it out for a few years at positive cashflow, then sell and cash out your seller? Would he wait for his cash?

 

[Thomas Beyer]

QUOTE (jhoper @ Jan 27 2010, 04:25 PM) ...
My current portfolio has roughly 90 properties in it within the GP area.
nice .. congratulations !!

why not sell a few and take a year or 3 off ? Or are they all "under water" due to GP price decline ?

 

[jhoper]

QUOTE (ThomasBeyer @ Jan 27 2010, 06:17 PM) nice .. congratulations !!

why not sell a few and take a year or 3 off ? Or are they all "under water" due to GP price decline ?

Thomas,

I bought most of my properties 7-8 years ago way before the boom and crashed happened. I am still ahead of the game on most of my properties. I have refi`d some of them but 80% of them have equity in them. I have thought about selling off 3-4 of them and take the money and relax.... Great idea.

JH