Am I crazy or will this work? - Posted by RC
Posted by RC on March 02, 2002 at 24:07:17:
Here’s the situation:
Him: Moving to Atlanta in the next couple months, bought a house two years ago with his wife for $142,000, says it was appraised at $195,000 recently. House is in good mechanical condition, but is not pretty. Needs paint, pool needs cleaned, conditioned, etc.
His wife wants my wife and I to have the house. I’ve proposed a lease option to him, but he’s a little nervous about that because he needs cash. He’ll have no job in Atlanta, his wife will.
I have about $12,000 in past due debt to clear up before the finance companies will look at me (according to about three different ones I talked to in the past year). He said he would try to figure out a way to help me out of that debt so I can get financed.
My NEW proposal:
He refinances the house (he doesnt think he can because of his credit) for $190,000, agrees to sell to me at $190,000, lends me $10,000 to help clear that bad debt, then moves with $38,000 cash in his pocket to live on till he gets a job.
I ask the city to help me with the downpayment (they’ve been running programs like that in Southern California for a while now) and maybe get $15,000 (for argument’s sake) on a new mortgage of $190,000, leaving $175,000 for me to pay over 30 years at whatever decent interest rate I can get (5-6%). I pay him his $10,000 back and begin my payments on my new mortgage.
He unloads the house and is free to look for another in Atlanta with $48,000 cash he gets in the equity on the California home. I get a house to move my wife and myself into. (In about two years, the freeway will be extended to a route that is 2 miles away, making the neighborhood more accessible, possibly raising the property value).
What am I missing here? This is a stretch I know, and I’m a newbie. Is there any potential in this deal that you veterans can see?