Moom asks . . .
Posted on September 6, 2006 - Filed Under My Strategy |
From last weeks post, Moom asked me: But you are planning on selling right away? Do you think you will get a good price compared to what you paid, plus the renovations (maybe we can ignore any other costs net of rent from the tenant as you got live there in the meantime).
Yes I am selling.
The reason for this is because the money from this project will finance my next project. For the real estate that I’m currently own, I more less got financing by giving away my first born child. Upon the sale of these houses, I’m hoping to get the next project on some kind of 80/10/10 financing (80% on a first mortgage, 10% on a second mortgage and 10% down). This will help me reduce my monthly mortgage payment and allow me to keep more money in my pocket.
I can’t access any more equity in the house because I’m maxed out, as far as my income level is concerned. There is a lot more equity available, I can’t touch, until the sale of the houses. It is with that equity I plan on moving on with.
With that being said, I do believe that I’ll get what I’m asking for on these houses. I’ve spent time researching comps in my area. While my house is not the most expensive comp, it certainly isn’t the cheapest.
Based on calculations, the amount of total cash I put into the house versus what I could get out is greatly in my favor. Once I sell the houses, I’ll be able to state what my numbers are: such as cash on cash back, return on investment, etc.
More questions to be answered tomorrow!
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3 Responses to “Moom asks . . .”
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OK - seems you are confident that you will make a profit - for me real estate always seems very risky - whereas the things I do in the stockmarket which seem very risky to other people don’t seem that way to me because I know what I’m doing. And this is even though once upon a time I was a real estate consultant/analyst
I’m gradually picking up all this jargon people use. First time actually I understand what 80/10/10 means for example in your post above. I knew 80 was a mortgage % but didn’t know what the final 10 was. Of course I know people much more clueless than me who want to buy a house.
BTW cool new photo though I kinda liked the old one too.
Moom, I’m sure you’ll agree with me that risk is part of the game. Whether you’re dealing with stocks or real estate. Believe it or nuts, I actually dabbled in stocks and was quite good at it. But then real estate came along. And the number of people I had available to help me was just something I couldn’t ignore.
For me, I needed to do something thrilling. Something more than just sitting in a cubicle. I very well could fall flat on my face regarding this property. Then again, I could do quite well. I don’t know. But that’s part of the attraction for me. There’s risk. There is something for me to pay attention to.
That’s why I do what I do. That’s why I wouldn’t do it any other way.
Clifford, Clifford, Clifford! Were you 1/2 asleep when you typed this post?