I got another update on the Louisiana project. As of my last report, it was decided that a second mortgage would be placed on the property and the money from that would be used to make payments to the first mortgage holders, while the payments on the second would be delayed. I'm pleased to say that now all the players have agreed to the terms and the deal is now in escrow. We expect to have our payments be resumed before the end of the month.
Friday, April 13, 2007
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2 comments:
Hey Sean,
Nice blog btw,
I have a cpl of newbie questions here.
1. Was wondering what made you put money down on the 2 properties that were priced under 100k? Was it because the there would have been no or negative cashflow at 100% financing or 95%?
Based on that observation, whats better, no money down infinite return? or 10k down on a 40k-70k property for a 11-12percent return?
Thanks
True no money down deals that cashflow are hard to find. I had money I had saved up for the express purpose of buying property, so I used it. I did not run the numbers for using no money down, but I'm sure they probably would not have cashflowed.
Obviously, an infinite return is better than a 12% return. What it comes down to is a question of how much risk you can tolerate. Personally, I invest both ways. The two houses I just bought have ROIs in the 12-13% range. The investment in Louisiana has an infinite return because none of the invested money is mine. But if you go this way, you better be able to handle the situation where things don't go as planned.
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