Tony Peter`s Creative Real Estate Course

[dleischner]

Good morning,

I thought I`d share some results with a recent success I had with one of Tony`s methods of buying property with no money down.

Senario:

I did a little advertising with the whole "We Buy Houses" marketing campaign and had a lady call me from Costa Rica (lives there for the winters running a fishing boat). She said that she had a rental property that she wanted to sell. I asked her why and she mentioned that it been vacent for about 6 months, because the previous renters trashed the basement (huge holes in the walls) and the bathroom stinks (because it`s full of mold). She also said that she had a rather large payout penalty, was tired of the hassle and couldn`t afford to complete the repairs. Instantly, a light went on for me....

The property was in a negative cash flow situation that could easily be corrected by changing the bi-weekly payments to monthly and fixing the home insurance. Basically two more months of mortgage payments would put her into a foreclosure situation.

I offered her two options.
1. I would buy the property from her for what she owed on it (close to $25K profit in it after the repairs were completed). With this scenario, she would be left with nothing in her pocket, but she would be rid of her problem house (in her mind).
2. I would partner with her on the property for 5 years and give her market value minus the repair cost. We would then split everything I could make for us above her purchase price (on paper) over the next 5 years. I would front the cost of the repairs (about $9K) and get my monies back from the positive cash flow of the property or lease to own tenant down payment or from her share of the equity appreciation at the end of the 5 years.

The whole process took about 1 month of emailing and phone calls, but the deal is now done. She signed my joint venture agreement and I start repairs on March 1st.

I`m hoping to have my money out of the property by April 1st with a lease to own tenants down payment (we`ll see).

Assuming everything goes well, she`s offered to take me and my wife deep sea fishing (on her tab) next time my family and I are in Costa Rica.

I`d call that a win/win deal.......

 

[EdRenkema]

Nice job and congratulations!
Thanks for sharing.

Can you explain some of your marketing techniques as in what, how much, and approximate cost?
Thanks.

 

[dleischner]

QUOTE (EdRenkema @ Feb 24 2010, 10:54 AM) Nice job and congratulations!
Thanks for sharing.

Can you explain some of your marketing techniques as in what, how much, and approximate cost?
Thanks.

Thanks.

Basically I created an ad and posted it on Kijiji for a couple of weeks (We Buy Houses, foreclosures, divorce, bla, bla, bla). All it cost me was time creating the ad and time replying to email and answering the phone. The trick is to call people back quick else they will just move onto the next one. So the cost was $0 dollars.

I guess it cost me $500 (approx) for Tony`s course too.

 

[housingrental]

Approximately how many hours did it take you total?

Do I understand correctly you`ll get 50% of the profit what she`s agreed to as the present day value in 5 years , etc. correct?

And you have to put up cash for repairs and carrying but get that paid back to you before she takes her appreciation? Or no?

So essentially your able to find someone to do a REIN style 50/50 JV but who also already owned the property and why you also having to front extra money for repairs, correct?

QUOTE (dleischner @ Feb 24 2010, 03:11 PM) Thanks.

Basically I created an ad and posted it on Kijiji for a couple of weeks (We Buy Houses, foreclosures, divorce, bla, bla, bla). All it cost me was time creating the ad and time replying to email and answering the phone. The trick is to call people back quick else they will just move onto the next one. So the cost was $0 dollars.

I guess it cost me $500 (approx) for Tony`s course too.

 

[dleischner]

QUOTE (housingrental @ Feb 25 2010, 07:34 PM) Approximately how many hours did it take you total?

Do I understand correctly you`ll get 50% of the profit what she`s agreed to as the present day value in 5 years , etc. correct?

And you have to put up cash for repairs and carrying but get that paid back to you before she takes her appreciation? Or no?

So essentially your able to find someone to do a REIN style 50/50 JV but who also already owned the property and why you also having to front extra money for repairs, correct?

I probably have about 10hs of work into the deal at this point (emails, phone calls, meeting with contractors, etc...). I`m partnering with her on the house for the paper purchase price of $250K (current market value after repairs is $275K). Since she has no money, I will be paying for the repairs upfront and reclaiming my costs from her equity at the end of the 5 year term (unless I put a "Lease to Own" tenant in with a down payment <then I will keep that>). The $10K of repair costs, will be taken out of her equity at the end of the project (if I don`t get a "Lease to Own" tenant). So basically, I am partnering with her on the house for $240K. Once I put together the deal, I used the REIN style 50/50 JV form to handle the specific details.

To sum it up, I`m partnering on a house at under market value, that the vendor will be paying for repairs on. I have an upfront cost of $10K which I will hopefully recoup in 1 month.

 

[housingrental]

Thanks Dean

QUOTE (dleischner @ Mar 1 2010, 11:12 AM) I probably have about 10hs of work into the deal at this point (emails, phone calls, meeting with contractors, etc...). I`m partnering with her on the house for the paper purchase price of $250K (current market value after repairs is $275K). Since she has no money, I will be paying for the repairs upfront and reclaiming my costs from her equity at the end of the 5 year term (unless I put a "Lease to Own" tenant in with a down payment <then I will keep that>). The $10K of repair costs, will be taken out of her equity at the end of the project (if I don`t get a "Lease to Own" tenant). So basically, I am partnering with her on the house for $240K. Once I put together the deal, I used the REIN style 50/50 JV form to handle the specific details.

To sum it up, I`m partnering on a house at under market value, that the vendor will be paying for repairs on. I have an upfront cost of $10K which I will hopefully recoup in 1 month.