Posted by Brent_IL on February 08, 2002 at 18:54:47:
nt
Buying Full Market Value with Good Terms - Posted by SharonB
Posted by SharonB on February 08, 2002 at 18:30:46:
Ok…this might be a dumb question, so please go along with the newbie here 
The numbers are a little vague, but it is just a scenario I put together.
Would you buy a home on the following terms with no money out of pocket:
Seller asking: $200,000
Comps around: $200,000
Obtain a loan for 80% (a lender allowing the seller carry the other 20%)
Seller willing to carry 20%
Seller willing to pay closing costs.
This would be a situation with no out of pocket expenses, but paying full market value. Then do a l/o to make a profit.
Does this sound feasible, would anyone do it?
Granted it is not a whole lot of profit, but then you did get the property with no money.
Re: Buying Full Market Value with Good Terms - Posted by JamesL (Ohio)
Posted by JamesL (Ohio) on February 08, 2002 at 23:55:31:
Say your payments to the bank on your 160,000 loan are $1350/mo.
And your payments to the seller are $300/mo.
Do you think you can get a buyer to Lease option the property from you for a minimum of $2000/mo?
Even in that scenario, with the buyer paying all of the bills, you would only profit $350/mo. Is that good for you??
Good Luck with your decisions.
Re: Buying Full Market Value with Good Terms - Posted by phil fernandez
Posted by phil fernandez on February 08, 2002 at 18:51:09:
Depends,
If the seller carryback was at maybe 0% interest for 3 to 5 years I’d do it. Or maybe with no payments to the seller with a lump some of the 20% with no interest in 5 years. The point I’m getting at is everything is price and terms.
I’d like to get both, but in the real world that seldom happens. However getting one of the two can often happen if you are persistent and zero in on the seller’s needs. A motivated seller is usually essential in one of these deals. I just bought a small mobile home park with the seller taking a 1st mortgage at 0% interest for the 1st 5 years.
back to your example. You could still make money on the lease option idea, but everything will have to break right for you to profit.
Re: Buying Full Market Value with Good Terms - Posted by SharonB
Posted by SharonB on February 09, 2002 at 24:59:24:
I have been lining up lenders for different financial situations…hard money, conventional etc. I just found a lender willing to do 80 LTV allowing the 20 seller carry back. Just figuring out my options as far as financing goes.
I have been brainstorming trying to figure out if there was any room for profit should I find a seller willing to carry a 2nd, pay closing costs but wants it near or at FMV…and the answer yes it could be, but with terms.
Thank you Phil for your reply
I have to remember the saying…you can have price or terms…but you can’t have both.
0% interest on a first mortgage? Now that is a really motivated seller.