Well, it turns out this investor I've been talking about recently is very experienced. I did some google searching, and found lots of information about him that definately leads me to believe he has been doing this for some time. While doing this research, I also gave hin the info of the deal I passed by last week. After a day or two, he got back with me and said it wouldn't work for him either. So it's good to know my due diligence resulted in the same conclusions as his: no deal.
I also had some downtime yesterday (while my daughter and wife took a nap) to revisit a deal I passed up last summer. I still don't know why I'm so hung up on this one property - maybe because it makes a good trial to base my figures on??? Anyway, I played with some numbers and figured the most profit I could hope to make from the deal would be $12,000, and this was with a lot of wishful thinking. For example, I would have to sell via owner-carry with an 11% loan. Not sure if that would even be feasible in my market even for people who can't qualify conventionally. during the two year loan term (it has a balloon at the end), I could either invest the monthly CF elsewhere or reinvest it in the form of added principle payments. It turns out, by reinvesting the monthly payments, I would pocket an additional $1,000 after two years in debt paydown / equity buildup. Again, there were just a lot of uncertainties, though, that could really put a dent in the net profit that I would need to iron out first. Still it really exercised my brain in owner-carry financing.
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