After 8 days on the MLS, 163 Poplar Street in under contract at $325,000. We had two offers:
$325,000 with a $10,000 seller assist (which means we, as the seller, would be required to kick back $10,000 in closing fees to the buyer - net result = $315,000
$319,000, with the buyer putting $140,000 down payment. No seller assist.
We countered both offers:
$335,000 with a seller assist of $10,000
$325,000, with 140,000 down payment and no seller assist
Both parties were interested in moving forward but we opted for offer #2. In the current economy, we feel it is better to go with the candidate best positioned for bank financing. $140,000 down should make any bank happy.
Periodically, I receive a news letter from a business mentor of mine - Keith Cunningham (keystothevault.com). Keith is an incredible business man and today he wrote about he and his wife/business partner's experience at this year's Berkshire Hathaway Meeting. He was kind enough to share some of his notes, which I found very interesting. Definitely gets the wheels turning......
KEYS TO THE VAULT
BERKSHIRE HATHAWAY MEETING
Sandi and
I just returned from Omaha and the annual Berkshire Hathaway meeting
with Warren Buffett.
Although we have been
shareholders for years, I never carved out the time to attend.... DUMB!
We will be going back next year.
I have always thought that if
you are going to listen to somebody, make sure they are eating their own
cooking and have created truly sustainable success. Clearly, Warren
Buffett falls into this category and his insights are crystal clear,
simple and make sense..... here are a couple that I found particularly
useful:
1.The key to getting rich is to create
a structure or set of rules that minimizes the "Everyone else is doing
it" syndrome. If everyone else is doing it, be wary!
2.The primary key to successful
investing is not the size of your circle of competence, but rather
knowing where the perimeter is. Too many people drift away from what
they know and in the process move from investor to speculator.
3.The biggest single cause of the
recent meltdown on Wall
Street is the Business Schools and MBA Programs throughout the
country. Teaching people to invest for the short term instead of owning a
piece of the business will always produce gyrations and spikes in stock
prices.
4.The most recent rise in the stock
market is primarily a result of low interest rates.... people can't stand
sitting on the sidelines making 2/10th of 1% on their money.
Money has started flowing back into stocks because there are no
alternatives and most investors can't sit and do nothing when there is
nothing to do that makes sense. Read more
My husband invested in the 'Flip' camera after taking this video. It's a little dizzy, at points, but the commentary is the best! : )
We listed this property for sale at $328,900 on Thursday of last week (May 6th). So far, we have had 7 showings and some positive feedback.
Unlike the others, this property is not a quick flip. In fact, this is the first property my (now) husband and I ever purchased, as a team. We bought the home in 2006 for $130,000 and immediately dumped $100,000 into it, to perform a head-to-toe rehab. We then rented the home to a family for the next 4 years, at a rate of $2100/month.
I almost hate to see the place go but the time has come. As I tend to repeat quite frequently, it is ALL about the numbers. There is simply too much equity in the home and it is not performing to the best of it's ability. To explain further, compare the following situations:
With a $26,000 down-payment, we purchased the property. After all expenses, we will making a profit of approximately $350/month ($4200/year), which translates to a ROI (Return on Investment) of 16% (4200/26000).
Years later, the value of the home has increased and the equity in the home is now $105,000. This means the ROI has shifted DOWN to 4%. (4200/105000)
So the question becomes, can we do better than 4%? We believe we can. At this point, typically you have 2 options - refinance and pull out equity to re-invest OR sell.
Due to the current banking conditions, refinancing is not an option for us, as investors. Therefore, we opt for sale. If we want to defer taxation, we will use a 1031 exchange. More about that later.....
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My mother taught me so many different things and is the inspiration behind much of what I do. For Mother’s Day, I thought I would share a few of the things I learned from my mom:
• It never hurts to ask, the worst they can say is NO – this rule can apply to so many situations but my most vivid memory is when I got a new job offer, just recently out of college. I was thrilled with the salary IBM offered but my mom told me to ask for a little bit more. “What’s the worst that can happen”? I recall being extremely nervous but she helped me find the courage to ask the hiring manager and it worked! A second example, from my mother’s life, is that as a young mother, without a college degree, my Grandfather helped her secure a job as a directory assistance operator with Bell Telephone (anyone remember 555-1212?). Over the years, she continually asked for promotions to positions, for which some may have said she was unqualified. If the answer was no, she worked harder and asked again. She achieved a fairly senior level of management this way. Read more
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Our latest project - 2 bedroom/1 bath home in the Pennsport section of South Philadelphia. This is our second house, on the same block, in just a few months (rehab on the first will be completed next week). The home is currently roughly 800 square feet. With a modification to the second floor, we will be increasing the size to ~1200 square feet. Finish the basement, all new hardwood flooring, new kitchen & new baths.... will make a great starter home for a single, couple or small family.
