Posted by Melodee on July 15, 2002 at 24:32:46:
Thank you Wayne,
I mis-typed part of my post. They are agreeing to put down $15K. They want to buy this ranch and retire there.
The wells are maintained by the man that leases the space to put them on—will have an attorney review all docs for sure.
I know there is a risk here but there is also about 100K to be made.
Any other thots, let me know.
Thanks again,
Melodee
1st deal & oil wells - Posted by Melodee
Posted by Melodee on July 14, 2002 at 17:27:35:
Hi everyone,
Well here it is—i’ve read so many others posts on their “1st deal” and now here is mine. It’s kind of a sentimental thing ya know–like a 1st tooth or the likes. Any way I really do need to get input from those of you that paved the raod for us newbies.
The Deal:
I put up my 1st bandit sign at the market and drove home–5 min later my phones rings and its a man asking me to buy a prop that has been on the market since Jan–loooong time for here in Ojai, So Cal----he wants to lease/option it from me—he’s heard of such things do I do that? SO I pick my mouth up off the ground and chat with him. They don’t have $$ for down payment—have been researching the prop for 2 months and have all the details.
I looked at this 3 mo ago and was intrigued but didn’t pursue it.
Beautiful 5 1/4 acre with 2+1 built in the early 1900’s.
Owned by local oil co.—has 2 oil wells & 3 storage tanks on prop—they are placing walls and shrubs around them—they retain the mineral rights on the prop.
$285K (cheap) others are selling for almost double but the houses on them are larger too–no exact comps in this area because its all ranches—one next door going into foreclosure is selling for $550K(needs much work)
OWC $275 @8% amortized over 30 yrs—for 3 yrs
I don’t have the other 25% but a local bank said it would do it with a full app.—I am working on a hard money lender instead.
I guess no one has wanted to deal with the wells & the financing (hard to get conv finan because of the wells still having some construction done.
Anyway the people that want to rent the place are people I like—they will pay $15 down and about 200-300 over what my payment will be, about $2300 mo.
There is a $28K report on the prop saying there is no ground contamination and meets EPA standards. What do y’all think?
Thank you,
Melodee
Re: 1st deal & oil wells - Posted by JFinke KC
Posted by JFinke KC on July 15, 2002 at 09:24:37:
Melodee,
You do not want to own this property. Too many potential liabilities. Since the buyer cannot get immediate financing and wants to L/O that leaves you in the transaction for a long period of time, not good. The only way this deal could work and limit your liability would be in you could get the seller to L/O it to you. This would limit your liability as you would not be the owner. You could then Sandwich L/O with your TBer or just rent to them and then assign your option to them when they are ready to buy. Then should things not work out you can just not exercise your option and you’re out of the deal. The owners would still be responsible for environmental problems, not you. When you L/O the property, make sure you put down less than half what your TBer is willing to pay and make sure you get a cashflow.
If the seller insists on you purchasing, move on to the next property. This is not something you want to own.
Good Luck,
JFinke KC
oil wells? - Posted by Donald
Posted by Donald on July 14, 2002 at 22:01:50:
Wells on property, EPA, local oil company, t/b with no money, WOW, what a can of worms!!!
I would not touch it.
my 2 cents
Donald
Re: 1st deal & oil wells - Posted by Dave
Posted by Dave on July 14, 2002 at 21:22:56:
Find another deal-
I have a friend who is in the same situation. Guess who gets to pay all the clean up, fines, and other related issues.
He has now paid out over 200k in getting these wells fixed. He did not research the industry or what he was getting into. He sure wishes otherwise. They may be looking for some investor with no idea what they are getting into to pass some responsibility onto.
Remember your not just getting the house! Remember what business your in. If your in the oil industry and understand it, then i wish you the best of luck.
Re: 1st deal & oil wells - Posted by waynepdx
Posted by waynepdx on July 14, 2002 at 21:16:35:
Pursue the deal but dump the buyers.
If they dont have at least 5k down then NEXT