Another one for the L/O pros.... - Posted by Lisa

Posted by Phillip on May 21, 2000 at 01:51:40:

I have a few questions…what if the loan balance is such that there is very little to no equity in a property, how would you handle the transaction?

Do you find that a lot of sellers will sell for the loan balance even if they know some equity is present, why would they do this?

Is it best to locate the property and then look for a buyer, or maintain a waiting list of buyers already screened by a good mortgage broker?


Another one for the L/O pros… - Posted by Lisa

Posted by Lisa on May 16, 2000 at 15:50:38:

I just got finished reading Joe Kaisers course. It was pretty good. I still have a couple of questions, but for now I only have one or two questions. What if I can’t lease this place in a month or two? I don’t want to be paying the rent. Can I put an escape clause in the contract telling the seller that if I can’t lease it then there is no deal. Also, Joe says to give the seller a check for the first months rent and to tell them that they can cash it once they agree to the contract. Well, I don’t have that money right now to give to them.


BTW…I’m going to go to the evictions office right after I finish posting this. Wish me luck…

Re: Another one for the L/O pros… - Posted by TRandle

Posted by TRandle on May 16, 2000 at 23:07:15:

After getting burned once on a condo I couldn’t move in a sandwich L/O, my agreement now reads my payments start the first payment after I find a T/Ber. I offer no money up front and my strike price is their loan balance. I don’t have a ton of experience at this, but so far the sellers have all understood my reasoning. And, even if you don’t maintain a current buyer list, it probably won’t take more than 6 to 8 weeks at the most to get someone in. Hope that helps…

Re: Another one for the L/O pros… - Posted by B.L.Renfrow

Posted by B.L.Renfrow on May 16, 2000 at 21:45:59:

Regarding an escape clause: you CAN, but I don’t think it’s a great idea. It puts you in a weaker negotiating position, if the seller isn’t convinced you are willing and able to perform. Look at it from the seller’s perspective: if they agree to such an escape clause, they are risking taking the property off the market for a significant period of time, while whatever problems prompted them to consider a L/O to you in the first place are continuing…with NO assurance you will do anything. Would you go for that? Not me.

A better plan is to KNOW going into a deal that you can find a T/Ber. How do you do this? By doing research, knowing the market rents for similar properties, then structuring your deal with the seller so you have room to make a profit. You determine market rents by reading the classifieds and calling landlords.

In most cases, I will try to get the seller to agree to 90 days before the first payment is due. I explain that I don’t want to put just anyone in their home; it takes time to find and qualify a T/Ber. They usually appreciate this point once they hear the explanation. To be honest, few will go the whole 90 days, but 60 is pretty common.

As for giving the seller a check up front, if you don’t have the funds, just don’t do this! Nothing wrong with the idea, but I very seldom give sellers any money until the first payment is due.

Brian (NY)

BTW, regarding your post above, about problems accessing public records. Another approach you might take is to call the local government reporter at the newspaper and just ask him or her what the law is in your area. Government reporters are always very knowledgeable about what records are public and which are not. It won’t cost you anything, as an attorney would, and if the office is breaking the law, could be an interesting news story!