$40,000 Potential Profit!! Need Your Advice... - Posted by Dave

Posted by PeteH(NYC) on May 23, 1999 at 14:11:36:

I don’t know that I would question the realtor’s motivation based on her not being overly encouraging when you verbally muse about an offer $50K shy of asking. Perhaps she’s just cagey. And if it’s true that the bank turned down an offer $20,000 higher than yours (although that could just as easily be a realtor fabrication, and a pretty good tactic), it seems silly to suppose she should be tracking you down for your lowball offer. In order to get her to take you seriously, you have to put your offer in writing – then she’s required to submit it to the bank. Which still doesn’t mean the bank is required to take the offer seriously.

In any case, it’s not the realtor you need to be motivated: it’s the seller. Track down a few motivated sellers, put a few offers in writing, and you’ll have much less need (and time) to speculate about how they’ll respond to an offer you haven’t made yet. THEN start thinking about how to make a profit on the bargain you picked up.

$40,000 Potential Profit!! Need Your Advice… - Posted by Dave

Posted by Dave on May 23, 1999 at 10:26:04:

Hi… I know of a bank owned property that is for sale. The appraised price is $128,000 and the current asking price is $121,000 (they just lowered it by $7,000 a couple of days ago). It’s a 3 bdrm., 2 ba. w/2 car gar. and a nice large fenced yard. The home has been for sale for about 2 months. It does need interior and exterior painting, needs carpets cleaned, and could use some minor landscaping. I have been talking with the listing agent since it was put on the market. I have told her that I might be interested in a $70,000 cash offer (I’m actually prepared to pay more than that, but I don’t want her to know that). She has told me that the bank would never take that because it hasn’t been on the market long enough. She also told me that they turned down a $90,000 offer because it had a contingency clause where the buyer had to sell their existing home first. I don’t know if I believe this or not. I have contacted this realtor 3 times concerning this property and she has never called me back to see if I want to make an actual offer. She’s not very motivated… I know if I was the realtor I would be trying to call all interested parties and get it sold. The market in this town is soft right now. Homes are still selling, but there are a lot of homes on the market. This town has a lot of homes for sale, but hardly any owner financed properties; hardly anything with terms. I think it’s because all the realtors think the old traditional way; get offer, send buyer to bank to get loan, wait for commission. I personally know of several people that want homes and have some down payment money, but just can’t qualify for formal financing. I’m thinking I could become a middleman. I could make low offers on some of these properties and then turn around and owner finance the properties at full price. I was thinking on this house of making an offer of $70-80,000. If accepted, I would then find an investor to put up the entire amount, based on the low loan-to-value ratio. Let’s say that I get the offer accepted for $80,000 and put $5,000 into repairs; I would then sell it at $125,000 with 10,000 down (No-Qualifying). Maybe I could get a spread on the interest rate, maybe not (since I have to borrow from a hard money lender at higher rates). I would like to figure out a way to do this without putting the property in my name. Any ideas??? What would you do with this situation to make money? I have bought and sold several homes, but I have always had the buyer get new financing. I have never actually carried the financing myself. I know that I will end up sitting on the homes that I buy if I don’t get creative about selling. Please feel free to give any ideas that you have. I feel like I have brain overload and need some outside input. Thank You and have a nice day… Dave