“Henry, there is a man on the phone and he is very upset” said my secretary.
“What is his problem”, I asked. “He’s yelling about the book you wrote about Teeny-Boppers”, she said. “Teeny-Boppers? “Oh well put him on”.
“Henry Dvorken, may I help you?” “Are you the man that wrote that book about Teeny-Boppers?” “I think it is disgusting”. “Have you read the book sir?” “No, but I heard about it”. “Sir I wrote a book call Sallee-Bop-TB, it’s about. . .’ “That’s the one, a book about a Teeny-Bopper named Sally”.
After a long conversation I was able to calm my caller down and convince him I was not a pornographer. I offered him an opportunity to come by my office and look at the book. He declined but did agree he must have been mistaken if I had made that kind of offer. The world is strange sometimes.
People who have read my book ask me about risk. I have done over 30 deals, and have had five problem cases. Three were solved by resale at a profit, one needs to be rehabbed before it can be sold, and one is in contract and will be closed by the time you read this article. Let me tell you about my 14th street deal.
Minerva Cantu said she needed cash for medical treatments for her daughter. It turned out she didn’t have a daughter, but that’s another story. Anyway I purchased her property (on the tax rolls for $19,950.00) for $11,500.00. If you’re from California multiply by 4 if you are having trouble with my Wichita Falls, numbers. If you’re from Arkansas divide by 2. We entered into a sale-lease back-option back agreement in February of 2003. Ms. Cantu was to pay $300 per month including $90 per month for Taxes and Insurance escrow; everything was great until she missed the September 2005 payment. We never could get her on the phone, and certified letters were returned. After 3 missed payments we started an action to evict her from my house. A constable served the notice.
I received a phone call from a very worried young woman. She introduced herself as Jennifer Solis, and explained she was purchasing the property under a Contract for Deed and had lived there since September of 2003. Cantu had sold a house she didn’t own to this unsuspecting young woman. We held a meeting and I agreed to sell her the house and carry the note at the same price as she owed Ms. Cantu. If Cantu had been timely with her payments, she could have exercised her option and repurchased the house for $9,800 cash. The new note is at 9% for $17,700.00. Sixty-seven payments of $340.00 give me a yield of 35.84% if I use the cash option price.
My investor is pleased to see her payments start again. She agreed to renew and extend her note in return for a greater payment and a new interest rate of 8.5%. I will have Helen Aldrich paid off in 29 months. In the meantime I receive a net of $50.00 per month cash flow and will receive an additional $12,920 from Ms. Solis after I have paid off Mrs. Aldrich.
The title of this article is not quite correct. Ms. Solis is happy, I am happy, Mrs. Aldrich is happy. Only Ms. Cantu is unhappy. She tried to pull a sneaky and didn’t get away with it. Oh well “truth will out” as they say.
Sallee-Bop-TB is about using the commercial real estate technique of Sale, Lease-Back-Option-Back to buy SFR’s for 60 cents on the Dollar and have management free cash flow. The book is available (see the product link above).
The names have been changed to protect the privacy of the people involved