Buying from an Investor, how best to proceed? - Posted by BrandonT (So.IL/St.Louis)

Posted by Bashir on February 13, 2002 at 14:47:28:

If you’re not going to do a private loan, and lease op., seller financing, and sub2 is out. Tell him you honestly don’t want to put a loan in your name right at this time, but if he would consider letting you get an option on the property for the existing loan balance you could help him sell. Tell him you keep a sizeable list of investors that buy rentals, and you’re confident that one of them would want it. The property looks like it might be worth around 50 to 60,000 dollars now(possibly), so the profit potential is there. The area may be a problem for a rehabber, but a landlord may buy. Do you have financing to line the buyers up with.

Buying from an Investor, how best to proceed? - Posted by BrandonT (So.IL/St.Louis)

Posted by BrandonT (So.IL/St.Louis) on February 13, 2002 at 13:49:35:

Hey there,

I’ve come across a man recently who has a few rentals he’s accumulated and is currently looking to unload them before he moves back to where he’s from, in Chicago. The property in question is the last one he needs to ‘get rid of’ and looks like a solid though bread and butter type of scenario.

Rental property in lower income neighborhood he bought many years ago for 42K and has held until presently. The property is currently rented Section 8 for $600 a month and PITI totals right around $300 monthly (I’m betting it’s around $350, but I have no reason to disbelieve what he tells me yet).

The man owes 29K on it and would be willing to sell for the balance of the mortgage, if “I could move quickly”. He has another investor who has contacted him and wants the original investor to ‘quitclaim’ the property over to him, but leave financing in his name for a couple years, which the original owner doesn’t want to do. This information obviously means I cannot purchase the property Sub2 or through a L/O as he needs the loan out of his name in at the most 6 months (unless I can combine the two facts successfully). The property physically has had recent remodeling and is actually in very decent shape, no immediate repairs needed.

Just looking for input as to how I could possibly make this work for all parties involved, I wouldn’t mind having another $300 in monthly cashflow but am not in a position to get a new investor loan in my name currently.

Thanx in advance for any ideas,

Brandon Treat
Southern IL/St. Louis

Re: Buying from an Investor, how best to proceed? - Posted by David (OH)

Posted by David (OH) on February 13, 2002 at 20:35:19:

This other investor that wants a quitclaim, do you know what he is giving the seller? Sounds like the only thing he is offering is to take the management headache away so the seller can move, which is nice but you could offer more and still get the seller to keep the loan in his name. The other buyer wants control of the property, the cash flow, and no loan obligation. One option as I see it is to differentiate yourself from this guy and offer a small amount of cash along with a sub2. Any idea on the FMV? Has the property decreased in value from $42k or is there at least $13k equity?

Other than that, I like the idea of getting a contract on the place for 6 months and finding another investor in the area to buy your contract, or maybe you could find financing for yourself in that time.


Re: Buying from an Investor, how best to proceed? - Posted by wpage

Posted by wpage on February 13, 2002 at 14:57:24:

I would somehow get the seller to sign an offer to purchase with you a.s.a.p with a closing date 6 months down the road. Offer to take care of the property for him in the mean time for free during the 6 month period. Lots of things happen in a 6 month time period. It gives you time to find financing, to find an investor or resell the property at a nice profit.There is no better motivation than to know that you have got to close in 6 months. Where there is a will there is a way. good luck