My first DEAL! Under contract...

My first DEAL! Under contract...

So, I have been watching a property in one of my target areas for some time. It sits across from a lake and a commercial property. It went to a foreclosure auction today. I set the limit I would go to and the auction never reached that price! I WON the auction! I AM NERVOUS! To say the least!

I found out the 'commercial' property across the street is being rezoned to residential... and is on the market for $1M!!! Now that ought to be a good thing for this property's value. Laughing out loud

Here's the info:

4bed/2 bath
1465 sq ft
Price paid 43,000 + 2500 for costs (New price I'm trying to renegotiate is now 5K in light of the findings and would require a total rebuild (basically buying land)
Conservative ARV: $180-200K
EXTREMELY LOW rent: $1200
Estimated (VERY)repair costs: 40-60K

I'm paying for the property through my self directed IRA and going to secure a private lender for the fix up of the property. I'm not sure if I'm going to flip this one or hold on to it. If I hold on to it, I stand to have a positive cash flow of over $500/month. If I flip it, I will have from 70-80K upfront. I'm not sure which option I'll choose. I looked on a few advertising sites, and there are many people looking for rentals in the area, so its very tempting to do a buy and hold. Especially if I could hold on to it until the property across the street sells and is completely converted to a SFR from what appears to be a restaurant.

It was sold by Fannie Mae, and guaranteed to have an insurable title.

I'm NERVOUS! EXCITED! ELATED! PRAYING! ANXIOUS! JUMPING UP AND DOWN LIKE A NUT! Laughing out loud

~Faith is being sure of what you hope for and certain of what you do not see. Hebrews 11:1

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By humility and the fear of the LORD are riches and honor and life ... Proverbs 22:4.
SUCCESSFUL PEOPLE DO IT WITH A HEADACHE! (~Dean Graziosi)

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CONGRATULATIONS

TAMMY THAT IS TERRIFIC. I WISH YOU ALL THE BEST


Woohoo!!!

Tammy, That is awesome!!! What a great feeling, You deserve it! Talk about some great numbers! And the toss-up between hold/sell? What a wonderful dilemma to have on the table, huh? Smiling COngratulations!! Enjoy every minute of it.

Rina

__________________

"Obstacles can slow you down, but they can only stop you with your permission." Dean Graziosi (BARM pg 101)

"For I know the plans I have for you," declares the Lord, "plans to prosper you and not to harm you, plans to give you hope and a future." Jeremiah 29:11

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Congradulations Tammy. That

Congradulations Tammy. That is just an awesome opportunity you have there. Many good things coming and I am sure with the way you found that property with those numbers you will have many more great "Conflicts" ahead. Nicely done!

Richard
Bothell, WA

__________________

Know what truely matters in life, consume yourself with that, and you shall never be disappointed, afraid, or alone. Give your gratitude always, give respect to everyone, and you shall never be anything less than what matters the most. Give praise to the Lord, forgive yourself and others, and with all of this together you will get a taste of what heavens lie ahead.


Under Contract

Way to go! Great Numbers!
From what I understand about funding a real estate purchase through your self directed IRA,(I have one) all funding must flow through the IRA. The re hab money has to come out of your IRA. Any expenses (re hab, normal wear and tear Etc) must come out of the IRA. Any gain (rent, selling profit)must go back in or be taxed. So as a retirement investment it will really increase the value of your IRA. Monthly deposits in your IRA from rent! 401k eat your heart out! Please let me know if you can buy through your IRA and use re hab funds from another source.
With those numbers you can flip the property to another investor and get a good gain for your IRA if you can't fund the re hab.

Good job and good luck!

Michael Mangham
MD Home Acquisitions LLC

__________________

Knowledge is power, but execution trumps knowledge. Tony Robbins

http://www.mdhomeacquisitions.com Seller site
http://www.mdhomeacquisitionsbargainhouses.com Buyer site
http://www.mdhomeacquisitionshousehunter.com Bird Dog Site
http://www.mdlodeals.com Tenant/Buyer site


Self directed IRAs

I spoke in depth with a rep at my trust company and he told me that you can fund part with an IRA, and the remainder with another loan. The % of the money that is financed by the IRA must go back into the IRA. As I understood it, any extra funding you get must be NON RECOURSE funds.

So, if you make a down payment with your IRA, and then get a loan to fund the rest, the loan must be secured only by the real estate, NOT you personally. If you default on the loan, they can not come after YOU personally, only the real estate. So, no garnishment of your wages can take place, nor any legal action taken against you personally should you default.

I am not an attorney and very new to this stuff and still learning, so please definitely check with your CPA, which is what I plan on doing tomorrow! Smiling

Someone PLEASE correct me quickly if I'm wrong!

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Come and see my video! SEND ME AWAY 2011 WINNER!!!! http://www.deansmedia.com/play.php?vid=243
Follow my JOURNAL (journey) here: http://www.deangraziosi.com/real-estate-forums/investing-journals/99510/...
Checkout my websites: www.zionpropertiesandinvestments.com
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“The way to get started is to STOP talking and to begin DOING!!!" ~Walt Disney
By humility and the fear of the LORD are riches and honor and life ... Proverbs 22:4.
SUCCESSFUL PEOPLE DO IT WITH A HEADACHE! (~Dean Graziosi)


Info on self directed IRA lending:

http://www.trustetc.com/new/real-estate-ira/ways-to-invest.html

__________________

Come and see my video! SEND ME AWAY 2011 WINNER!!!! http://www.deansmedia.com/play.php?vid=243
Follow my JOURNAL (journey) here: http://www.deangraziosi.com/real-estate-forums/investing-journals/99510/...
Checkout my websites: www.zionpropertiesandinvestments.com
Please come to my fb page and LIKE me: www.facebook.com/WeBuyHousesHonestly
“The way to get started is to STOP talking and to begin DOING!!!" ~Walt Disney
By humility and the fear of the LORD are riches and honor and life ... Proverbs 22:4.
SUCCESSFUL PEOPLE DO IT WITH A HEADACHE! (~Dean Graziosi)


Tammy

Great Job on the deal and welcome to the trenches!! Boy, rough decision here for you. Do I make money now or later, HMMM!!!!...Jan


CHOICES!

Well, I can get a private money lender for the whole deal; and I'm not sure which direction would be better to go. Being my first deal of this type, I feel like a fish out of water.

I want to be able to pay off mortgages with money we earn, and I know all money in an IRA needs to go back into it. But I know the tax ramifications of making money. I need to make a quick decision on whether to have fast cash or steady income and having another tenant, or maybe even a lease option!!! Laughing out loud Decisions, Decisions! Eye-wink

I also have to let the auction company know within the next couple of hours who the buyer will be; the FBO IRA or the LLC; they state once the buyers name is put down they are not able to change it until after closing!!! No PRESSURE! AAHHH!

__________________

Come and see my video! SEND ME AWAY 2011 WINNER!!!! http://www.deansmedia.com/play.php?vid=243
Follow my JOURNAL (journey) here: http://www.deangraziosi.com/real-estate-forums/investing-journals/99510/...
Checkout my websites: www.zionpropertiesandinvestments.com
Please come to my fb page and LIKE me: www.facebook.com/WeBuyHousesHonestly
“The way to get started is to STOP talking and to begin DOING!!!" ~Walt Disney
By humility and the fear of the LORD are riches and honor and life ... Proverbs 22:4.
SUCCESSFUL PEOPLE DO IT WITH A HEADACHE! (~Dean Graziosi)


Congrats Tammy!!!! That had

Congrats Tammy!!!! That had to be exciting when you won the bid,I wish you the best, which ever way you go with it.
I cant wait to hear the end results.

Richie.


good for you tammy let us

good for you tammy let us know what happens
take care


Wow

Good Job!


Thank you for all the encouragement!

I will keep everyone updated!

Well, I decided to take title in the IRAs, split 55% for me, 45% for my husband. It was really odd, the representative had never heard of doing things this way and has worked there for over 5 years! WHAT?

Well, I can imagine that not too many people realize this can be done; I know I was one of them. I wish I had known about this when buying one of my rentals!!! My husband had money sitting in old 401Ks from as far back as 1992 and mine were from 1999!!! Laughing out loud Glad to make good use of the money, and grow my account!

__________________

Come and see my video! SEND ME AWAY 2011 WINNER!!!! http://www.deansmedia.com/play.php?vid=243
Follow my JOURNAL (journey) here: http://www.deangraziosi.com/real-estate-forums/investing-journals/99510/...
Checkout my websites: www.zionpropertiesandinvestments.com
Please come to my fb page and LIKE me: www.facebook.com/WeBuyHousesHonestly
“The way to get started is to STOP talking and to begin DOING!!!" ~Walt Disney
By humility and the fear of the LORD are riches and honor and life ... Proverbs 22:4.
SUCCESSFUL PEOPLE DO IT WITH A HEADACHE! (~Dean Graziosi)


Reading through the contract was scary!

I basically rescind all my rights and have no outs. Is this normal for a Fannie Mae?

And, apparently they define real property differently in WI than CA. In CA, anything attached to and part of the home, like a garage door opener, blinds, medicine chests, etc is considered part of the real property. In WI it can be taken as personal property. interesting tidbit of information!

__________________

Come and see my video! SEND ME AWAY 2011 WINNER!!!! http://www.deansmedia.com/play.php?vid=243
Follow my JOURNAL (journey) here: http://www.deangraziosi.com/real-estate-forums/investing-journals/99510/...
Checkout my websites: www.zionpropertiesandinvestments.com
Please come to my fb page and LIKE me: www.facebook.com/WeBuyHousesHonestly
“The way to get started is to STOP talking and to begin DOING!!!" ~Walt Disney
By humility and the fear of the LORD are riches and honor and life ... Proverbs 22:4.
SUCCESSFUL PEOPLE DO IT WITH A HEADACHE! (~Dean Graziosi)


Diamond in the ruff!

Tammy,

Great job finding and tracking down this auction and then having the courage to bid and win, very intimidating environment for the first time I'm sure.

It truly sounds like a phenomenal deal and great opportunity to make great money.

All the best sorting through the rest of the decision making!

__________________

Luck is when Preparation crosses paths with Opportunity!


Tammy,

CONGRATULATIONS! Way to go.

Lea
SPR Property Solutions, LLC


Tammy

Awesome that is great!!!

If you fund with your IRA, all money & rents must go back to the IRA. It is good for your retirement fund, but if your goal is to generate cashflow or money you should fund with another method.

__________________

... Verses: 35 "but those who hope in the Lord will renew their strength. They will soar on wings like eagles; They will run and not grow weary, They will walk and not be faint." Isaiah 40:31 ...


Congrats on your deal!

Congrats Tammy!!!!
I wish you the best, please keep us updated Smiling
It must be a great feeling when you won the bid...
Great job!!!

Miyuki a.k.a. Coco

__________________

Whether You Think You Can or Can't, You Are Right
~ Henry Ford ~


awesome!

Congrats! the numbers look great..

__________________

Jason S.
San Diego, CA.
**All CASH House Buyer!**
Refer Us To Neighbors, Friends & Family, Earn $1,000
LIKE my FB page http://www.facebook.com/JandBHouseSolutions


Congratulations!

This if fantastic to hear! I am happy for you and encouraged in my own path. Thanks so much for letting everyone know!

Wishing you many more successes,
Annette


Thanks everyone for the encouragement

With all the negative feedback and criticism from my husband, I REALLY rely on this site for that positive attitude and encouragement I need to surround myself with. Laughing out loud

Thanks again!

I got my initial estimate for taking care of the mold in the basement crawl space, and worse case scenario is 4K, which isn't too bad. So, I am encouraged by this, because I thought it would be worse. This is definitely a learning experience, and I will share everything I learn from it so you all don't have to make the same mistakes! Smiling

__________________

Come and see my video! SEND ME AWAY 2011 WINNER!!!! http://www.deansmedia.com/play.php?vid=243
Follow my JOURNAL (journey) here: http://www.deangraziosi.com/real-estate-forums/investing-journals/99510/...
Checkout my websites: www.zionpropertiesandinvestments.com
Please come to my fb page and LIKE me: www.facebook.com/WeBuyHousesHonestly
“The way to get started is to STOP talking and to begin DOING!!!" ~Walt Disney
By humility and the fear of the LORD are riches and honor and life ... Proverbs 22:4.
SUCCESSFUL PEOPLE DO IT WITH A HEADACHE! (~Dean Graziosi)


Wow, Tammy

Congrats on your deal!

Peace and Blessings,

__________________

“Our deepest fear is not that we are inadequate. Our deepest fear is that we are powerful beyond measure. It is our light not our darkness that frightens us. Actually, who are you not to be? You are a child of God. Your playing small doesn’t serve the world. There’s nothing enlightened about shrinking so that other people won’t feel insecure around you. We were born to make manifest the glory of God that is within us.”

- Nelson Mandela


Cograts Tammy

Thanks for sharing the details of your deal. You did what everyone encouraged, that is to take action and the result is evident. Congrats on a great deal. God Bless.

Sandra

__________________

"You can never get to the top, if you are not willing to climb. Do not look at the difficulty of the climb, only anticipate the view from the top."
"Can't even walk without you holding my hand." (Song)
"Is anything too hard for the Lord ..." Genesis 19:14
"In all things, wait on the Lord."
"Think not of your own deliverance, but trust in God who will give in abundance."
"When you are down to nothing, God is up to something." Unknown
"Our lives begin to end, the day we become silent about those things that really matters." Dr. Martin Luther King Jr.


Great Job!!

I've read some of your journal and see that you have definately been doing your homework to get to this point. You had all the tools you needed when you came across this great opportunity. Get everything buttoned up then...NEXT!


GOOD FOR YOU !!!

You help encourage all of us and I appreciate the information about the FHAs and 401ks. THANKYOU!

Sincerely,Vicki

__________________

Count your garden by it's flowers, Never by the leaves that fall
Count your days by golden hours, don't remember clouds at all
Count your life by smiles, not tears, and with joy on every birthday.
Count your age by friends, not years
Author Unknown


Way to go!!!!

Congrats to you and to the action that you took and got results.
Keep updating and it will be interesting to see your progress on this transaction.
To Your Success!
Laura
www.bmwinvestproperties.com


That's great Tammy!!! You

That's great Tammy!!! You deserve it. Blessings to all. LA

__________________

Everytime you repeat the words "I CAN DO IT" with conviction, you cancel or override your fear and increase your confidence. By repeating this affirmation over and over, you can eventually build your courage and confidence to the point where you are unafraid. -Brian Tracy-


congratulations

Congratulations on your deal.


Pittsburgh, PA

Anyone looking in this area, pm me your e-mail address and I will forward the info to you.

Sandra

__________________

"You can never get to the top, if you are not willing to climb. Do not look at the difficulty of the climb, only anticipate the view from the top."
"Can't even walk without you holding my hand." (Song)
"Is anything too hard for the Lord ..." Genesis 19:14
"In all things, wait on the Lord."
"Think not of your own deliverance, but trust in God who will give in abundance."
"When you are down to nothing, God is up to something." Unknown
"Our lives begin to end, the day we become silent about those things that really matters." Dr. Martin Luther King Jr.


Congratulations

Congratulations on a great deal. I see you are well on your way now that you got the first one. Keep us posted on what happens.


Congrats

Sounds like a good deal. You have definitely entered new territory. Keep us posted on how everything goes.

__________________

Cathy B

Follow my progress at:
http://www.deangraziosi.com/real-estate-forums/investing-journals/44397/...


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