David here, well yesterday, Friday, Sep 29th i closed on the home on Peach st. Now this is my first time to personally use my own credit to obtain money from a bank to buy an investment property. While i have done about 50 real estate deals i have either used assignments, partners or my own cash to do all previous deals.

I used a small local bank to obtain a construction loan which is a short term, 12 month, loan at prime(currently 8.25%) plus 1 % so its 9.25% plus one percent origination fee. My purchase price was $66k plus about 8k in other expenses including $3500 to a wholesaler who brought me the deal, $880 for a 6 month builders risk insurance policy(which covers vacant homes, you normal policies dont cover vacancies over 30 days), property taxes, $600 for a title insurance policy and other closing costs including the fact that i paid most of the sellers costs as well. This home appaised at $170,000 after repairs and the loan will allow me up to 70% of that amount which is around $119,000 leaving me about $45k available to me for my rehab costs. i presented the bank with a budget of just under $50k in rehab costs but i expect to get most of the items done a bit below budget due to my experience with contractors, however there is always something that gets overlooked.

Now as we are going through the rehab process i will attempt to wholesale the property as-is to other investors, as well as consider selling it retail when complete. As this area is poised for growth over the next few years i may rent it out and keep it long term. My favorite rental strategy is lease option otherwise known as rent to own and i could probably mark it up to $199,000 on a lease option and have it appraise for that when my tenant would excercise the option.

Also, yesterday i had an out of state buyer come to town and close on buying 3 of my houses i was wholesaling. The combined profit for the 3 houses after holding costs was $21,000.

This week we did a new direct mail campaign aimed at finding sellers for short sales and we put about 14 new short sales in motion this week which is a record for us. Based on our short sale closing ratios that should turn into 5-7 completed deals over the next 2 months.

I am on pace to buy 80-90 homes this year and as my rate keeps continuing i can see where in 2007 i could feaibly reach 250-300 homes during the year. I started this year doing 2 homes a month which grew to 5 then 10 and i expect october to be 15 and 20 and 25 will be coming up very quickly near the start of next year. This business keeps getting more and more exciting.