Dan,
Again your advice and Ron’s training paid off! We have another sandwich lease-purchase.
This success was from another yellow letter response through Pat Live. When we first contacted the seller, the price was $50,000. The house needed around $5,000.00 in work, but was certainly habitable. The ARV was $65,000.00. After a discussion with you, we knew our exit strategy would be a work for equity. Using Ron’s technique, if I pay all cash and can close immediately, what’s the least you would take and the follow up, best you can do? She finally agreed to $40,000.00.
When we went to sign the paperwork, she began to have doubts. Again using Ron’s training, I told her and I meant it, if this is going to keep you up at night, I would prefer you not do the deal and then I shut up. She thought about it for at least 2 minutes or longer, while nothing was said. She then turned and said, hand me the pen.
We signed the deal for $40,000.00 with a 5 year balloon note at $450.00 per month with nothing down at 0% interest on a lease-purchase. Three weeks later we had an agreement with a tenant buyer for $50,000.00 purchase price. We got $5,000.00 option deposit and $700.00 per month.
At the end of 5 years we will owe $13,000.00 and tenant buyer will owe $33,000.00.
Profit if it goes 5 years is $5,000.00 + 20,000.00 + $3,000.00 = $28,000.00.
Tim Howard and Greg Howard
Shouldn’t the total payoff be $5000 deposit +$20000 backend at payoff +$3000 a year for 5 years ($15000 total rent spread) for a total payoff of $40000?
P.S. I haven’t even been to boot camp yet, let alone done any deals like they have, but this seems like simple math to me. Can someone please tell me what I am doing wrong?
MARK, I believe they are giving $200 a month as rent credit. This equals $12000 in 5 years + $5000 they gave already, $17000. That’s why balance is $33000.
Thanks for the help, Fernando. I just got my cash flow systems course. I guess I am going to have to really start studying it so I can start figuring this stuff out for myself. Anyway, thanks again for the help. Have a great holiday.
That is how it is done! Great job and great job with the negotiating. It seems that the training came back to you when it was needed! Blessings to you!
Hello Tim & Greg, thanks for the informative success story and the posting. Good job on the deal and the three year $28,000 profit, enjoy the financial ride. Never give up and keep on investing, moving forward and make us all proud of you. Take care.