Two of Our Latest Acquisitions

Our two latest purchases are both 3/2 ranch style homes, the first is 1378 sq ft on a 10,000 sq ft lot - completely updated but missing the master bath! We are selling it with seller financing (before 1st July!!) in its "as is" condition to a young couple who will probably be able to finance us out within 6 months.

Purchased house for $165k and seller financing for $200k with 10% down at 7.5%.

We will be working with this couple on getting them financed through traditional means by working with our team of credit repair and mortgage specialists.

Couple are very excited and have been calling every other day during closing process to find out when we can get them into ownership - very cute!

Our second acquisition, also a cosmetic fixer, (actually closing next week) is an approved short sale at $110,000. We have a potential young couple who will also take it in as is condition for $155k. This couple will be in a rent to own situation for approx. 6 months while we work on getting them financed. We are not willing to seller finance to them due to not having enough down for our comfort. We are working with them as they have good, long term jobs and their payment upon purchase will be less than what they are currently paying in rent by about $200/month.

Latest Underwriting Condition

We have been really busy with all of the transactions we have going on.

Things to be concerned about for us right now are the ongoing appraisal issue, increasingly onerous underwriting and funding conditions that are coming from the banks, and of course the highly controversial new SAFE Act which seriously affects investors' right to seller finance.

One of the most recent funding conditions we had was based on an underwriter's viewing of some chipped paint on an outside garage which we had to paint prior to funding (pictured here beautifully repainted in its entirety at a cost of $200)

Seller Financing Continued

SO, we have a total of 3 seller financed transactions in progress in addition to one closed.

Our goal is to set up notes that create at 9-11% yield to a note buyer. The second of these is as follows:

Purchase Price: $175,000
Downpayment: $17,500
First Note: $130,000 @7.5%
Second Note: $27,500 @7.5%

We will be marketing first note for $115,000 which will give a nice passive yield.

This creates a great win/win situation for a couple who could not qualify for conventional financing and an investor who appreciates the opportunity to earn a better than average return on investment secured by local real estate!

John Schaub Class

Went to hear John Schaub speak at the SJREI club in Pleasanton on Wednesday - great information as always. One day class on Saturday followed by dinner at local restaurant.

WHAT A KERFUFFEL

Well, we have had an exciting few weeks in Real estate on our end.

First of all, we have a new website which gives info. on all of the great ladies I am working with - we can be found at www.solanocommunityinvestorsgroup.com

On the Real Estate Side, having had 2 of our houses fall out for the second time, we are now switching to Seller Financing.

First House:

2749 Tuolumne Street, Vallejo

This was a profit sharing deal with half of net profits to underlying financing. As this is not longer a "cash out" deal, we will be adjusting the underlying note UP by half of net profits (more now as no RE commissions) and looking to cash out by selling note.

Buyer is a RE Agent with 10% down on purchase price of $164,900 30 yr fixed at 7.5% fully amortized 5 year balloon . Underlying Financing is currently at $92k and will now adjust up to $109,500 at 7.5%

Stay tuned!

First Quarter Review

We have certainly had an interesting first quarter in the "residential redevlopment" market with all of the changing market conditions.

Of the properties we rehabbed and put up for sale, we have had two fall out at the underwriting stage, several extensions on the others, and a couple scheduled to finally close this week.

Of the two that have fallen out (twice), we are now entering into a seller financing/rent to own option to avoid having any more non-income-producing down time.

Our plan is to structure the seller financed notes to be able to cash out of a first and stay holding a second - stay tuned to see how it works out!

There has definitely been a shift in our market this quarter.

We have noticed the usual last minute rush to get the $8k tax credit.
We have noticed an increased number of rehabbed listings for sale, thereby shifting the supply/demand balance.
We have noticed an increased number of listings of the bigger houses (1600 sq ft and up)
Definite increase in strategic walkaways.

Curious to see what unfolds this next quarter!

New Listing

This is another little house that is going on MLS tonight.

2/1 900 sq ft - ok part of town although not East Vallejo.

Bought for $62k, spent $12k and back on at $105k

With 3% down and 5% interest rate, someone can own this house for $546/month plus taxes and insurance (probably another $120 or so per month) Still cheaper than rent!!