Posted by Kristine-CA on February 13, 2002 at 17:02:22:
David: thanks for your message and all the good questions.
I’m not planning on doing any major repairs. It is a fixer in a very working-class town. It’s appeal is that I would be willing to lease option. 35K is a realistic price for lease/options and carrying paper. The problem with a lot of the deals I have been looking at is that the properties are difficult to qualify for conventional financing because they do not have concrete foundations. So while it is possible to get someone signed up for a lease/option, I think their ability to qualify for financing is problematic. And I’m not very gung-ho about the idea of taking someone’s down payment and cash stream for a couple of years only to re-possess. It appears that this has been the strategy of several other investors in this area. One of them admitted to me that he’s made lots of money over the years in this area because no one ever qualifies for a loan and you just l/o over and over again. Yuk.
I like your suggestion about assuming the mortgage and then having the t/b buy me out. However, I doubt if I can assume the mortgage. I don’t think my credit is strong enough and the loan does not appear to be assumable. Still working on that.
Funny thing about the calls I am getting. I was really hoping to do flips, but in order to solve people’s problems, it looks like other REI methods are needed. Great thing about CREonline–it’s where I heard about all the different possibilities out there. I’m glad to have the ideas under my belt. Now, on to some experience getting these deals done. Sincerely, Kristine