Our second purchase 6-18-10

 Our second purchase is a new single family home, purchased at a cost of $36,000. ($39,109.75 after settlement cost) The home is located in a rural area, on a dirt road, south of San Antonio, Texas.
Three bedroom one bath

Lot size 60' x 130'

1,056 square feet.

No garage

This is a bank owned repo (REO), we paid 15% down plus closing cost. We anticipate on spending about $5,000 on fix up. The house will be rented at $650 a month or sold on a rent to own.

Here are the numbers:

Purchase price $36,000

Loan origination $1,259.00

Credit report $15.00

Flood certification $14.00

Interest escrow $65.75*

Insurance $351.00*

Escrow deposit $393.04*

Title policy $480.00

recording fees $122.00

Total settlement at closing $3,109.75

Total price $39,109.75

• These are actual deductible expenses not cost basis.

Improvements planned: Gravel base drive way extension, chain link fence, touch ups, Stove.

Estimated total cost after improvements $44,000.00

Payments: $334.86

Principal and interest $257.39

Escrow $77.47

Total $334.86

Five year balloon note

Rent: $650.00 Rented August 1st 2010

Annual income $7,800.00

Payments $4018.32

Potential cash flow $3,782.00

Profit as a percent of cash invested 37% ($3,782 divided by $10,000)

Annual profit as a percent of total investment 17% ($7,800 divided by $44,000)

Note: we are offering this house on a rent to own basis. $75,000 easy qualifying, 12% interest. Tenet did not take the rent to own opetion

So how do you find great deals? Look! they are out there, in every price range, and you should always be looking. Talk to realtors, go to investment clubs, pass out cards, talk to everyone, check the real estate web sites, Drive the side streets. Take the back roads home.  Google bank owned real estate (REO's). Etc, etc, etc.
You make your own luck, or said another way, good luck comes to those who seek it out.

Here is the link to Gem Rental Property's first purchase.

http://www.towardswealth.com/node/258

The rich get richer because they are working at it.

Update: 6-21-2010 we have had the for rent / for sale sign up five days, we have had 7 calls so far.

8-1-2010 The house was rented to a school teacher for $650 a month. $600 deposit. We had more interest from potential renters on this out of the way house then any other we have ever owned. The keys where, new house, three bedroom and only $650 a month.