I agree that the husband is the key. I’m sure he is going to need cashed out to get off the deed. I think I will offer his half of equity minus paperwork, closing, and his half of commission. Sound fair?
I think the wife will be very open to a deal, she grew up in the house and her dying mother asked her to take care of the house, but her father lost it. There are emotions involved ie: she is a motivated buyer
Is there way that I could still just rent to her, but get the deed and use her equity as option consideration? This way my cashflow is greater, the salesprice of my home is reduced the same. If she defaults, the LTV would not matter, she will be evicted, not foreclosed on. Am I being greedy?
Another issue would be the fact that without a lease on the property, improving my D/I ratio, I don’t think I could qualify for another mortgage. And I’m sure the bank wouldn’t be happy if I showed them a L/C. They also only use 75% of the lease amout as income for qualifying.
Help me out here Brent or someone, I know you pros see a simple answer here…It’s kind of like the forrest and trees type thing, I can’t see it yet.
I have a rehab that I am selling on a L/O (at least trying to) Terms are $1200 mo w/ $200 toward purchase and 5k option money. House is a SFR, and worth $140k, I have about 55k in equity. It’s the nicest thing on the market in this price range. More details to follow in another post for newbies.
Two qualified woman both want this deal, but with different terms and one more qualified than the other. But, I think I may see another deal here.
I need some advice on this one.
Option 1: Sell on my terms to well qualified buyer, she has plenty of cash from the sale of her old home and actually wants alot of extras done to the house that she will pay either cash for and/or work some into the mortgage. She loves the house and is going for a 15 yr mtg, so even the payments were of no concern. Bottom line is she cashes me out, and I make about 8k for additional work. Not too bad since I found her after 3 days in the paper and the house isn’t finished yet!
Option 2: This is the complicated part and I am looking for a deal here. This buyer is a little cash tight, she wants to rent until she sells another home. She doesn’t have the 5k, but can do sec. deposit, pet deposit, and first mo. She feels the other home is worth 90k, and that’s what she will be asking.I checked the comps and they support better, the high was 128k in better shape, smaller lot, same bed/baths. The loan balance is about 50k. So there is a potential deal here, but what is the best way to get rid of the ex-husband get her property? I figured ask him what he needed to disappear, take property sub2 and take her equity off of the sales price of my L/O.
What do you think? I’m gonna do the math as soon as I quit typing, but what method of CRE can be applied here?
Re: Best way to work this deal ? lil long - Posted by Brent_IL
Posted by Brent_IL on August 21, 2003 at 21:55:38:
#2 is better, if and only if, you get the husband off title. If that occurs, then;
Tell buyer to deed you the house. By her account, she has $40K in equity. Subtract $40,000 from the rehab price, offer 100% financing and have her sign a $100,000 note for the balance. Do what is appropriate in refurbishment to get as close to $128K FMV as you can.
Sell her old property that has been recently spruced up for cash.
If she defaults on the rehab, you have a good LTV. $100K loan; $140K FMV.
She has a lower payment structure.
You have cash.
Talk to the husband to find out where his head is. He?s the key.
