Re: But, but, but… - Posted by Ed Copp (OH)
Posted by Ed Copp (OH) on May 01, 2000 at 13:56:58:
I have had a lot of experiences that were painful financially. Most of them were my fault, and avoidable. There are several areas that I take special care to protect myself in. Anything to do with the federal government is at the top of my list. IRS and the VA being right up at the top of the list. Also I am a real estate broker in OH, so I try not to get the division of real estate involved in any of my transactions. I just do not care to take the time to fix a mess if I can avoid it going in.
Now all that stuff being said, I find nothing wrong with the meterials presented by Bill Bronchick. I have not taken his courses but I have read a lot of his meterial on his site and this one, in my opinion it is sound.
In the matter that we were discussing, I would say yes buy it subject to, if the rest of the deal makes good sense. Since there is a second motrgage on the property be careful not to pay too much going in. If it was my deal I would want to place myself in the position of making the underlying mortgage payments, or at lease being able to control the flow of payments. If you buy L/C and the seller has the responsibility of making the payments, what do you do if for some reason he stops sending in the payments. What if he keeps the second mortgage current, and stops paying on the first (VA insured)? There are many things that could happen to mess things up.
Now if you buy subject to and sell on a L/C I would think that this would offer a pretty desirable position for you, especially if you could use a balloon to get the new buyer refinance and pay off the old loans.
You asked about the folks who will pay 5-10K for your beneficial interest. Well they are out there but they are not necessarily advertising. Often they have cash in a safety deposit box, or a coffee can, or an old sock, etc. Frequently they do not have a visible job. Often they are going to be good buyers, down the road when they get a problem behind them. There are a lot of reasons that someone will do business this way, many are quite legitimate and some are best not discussed. Usually this results in good business transactions, especially if we do not make any mistakes going in. Just take reasonable care and try not to overcomplicate things. Buy low and sell high. Hope this helps a little…ED