Posted by Chris in FL on March 31, 2006 at 14:18:26:
Drew, I don’t understand what you are asking. If the house is worth more than what you owe on it, and you have a preapproved tenant-buyer, and want to cut ties, just sell it. At closing the title agency pays off your loans, and closing costs, and gives you whatever is left over (or, if you owe too much, you would have to cut a check to be able to close the sale). Simple. Be aware you likely have to pay taxes on the total profit you made (including the cash you pulled out previously), though there are ways to reduce or defer that.
If you were somehow able to over-leverage (borrow more than the house is worth), then you have a tiger by the tail, and might need to explore options. If it is likely to appreciate, you could hold it until the value goes up. Not sure I understand your take on owner financing - is the tenant not preapproved, as I thought you stated previously? Or, are you going to get a higher price if you owner finance? You can owner finance with the existing mortgage in place if you want, using a wrap-around mortgage, but if you don’t know much about owner-financing you should study that some (right and wrong ways to do it to protect yourself and maximize your profit, i.e. - banks can collect points when originating a loan, and you probably can too). If you can find it, I made a post on this sight earlier today with some advice about holding a mortgage (certainly not everything there is to know, but a few pointers). Ed Garcia, who teaches and frequently is on this board, is a guru. I will send you a private e-mail, with my phone number, and if you need more answers I will TRY to help. Hard to discuss in detail because I don’t completely know the situation. Anyhow, good luck.
Posted by Drew Brown on March 29, 2006 at 09:20:22:
My question of the day. I got all my properties, and tok the cash out financing at closing. Now Im paying back the remainder of course but what I want to know is would it be possible to sell the houses at at least 15% higher than what the note is even though Ive collected money in the beginning?
Posted by Drew Brown on March 30, 2006 at 13:08:42:
Well what if Im selling the house to someone who wants to buy to live in? If they get pre approved for the asking price then it was considered fair correct?
Posted by Chris in FL on March 30, 2006 at 14:16:59:
Drew, Preapproval just means the buyer is approved for a mortgage in that amount, if the information they gave the lender was accurate. It has nothing to do with the value/price of the house. If buyer needs to get a mortgage, an appraisal will almost always be required. If you are a little over priced, the appraisal may work and it may not (most appraisers try to justify the sell price as being fair market value). If you are way high, odds are greater that it won’t fly. Are you asking “what is the value of this property and what can I sell it for”, that has nothing to do with your pulling money out of the property or a buyer’s preapproval. If you are you asking “I am selling way too high 'cause I found a sucker and I want to know if it will fly?”, then shame on you because you are not doing good, fair business. Odds are the appraisal will come back low, and you should lower your sell price to what the house is really worth.
Posted by Drew Brown on March 31, 2006 at 13:07:21:
No no no!! I want to be rich but not at the price of my soul!! Im still fairly new in the game, and I was looking at trying to sell the house to my current tenant. But since Im paying the note, and already cashed out, I was looking to sell and keep a penny or two? Should I see about a loan to buy up the note and then just do seller financing? What would be the best way to go if I just wanted to sell and make some change off? Im wondering this as well due to the fact that Im moving in the next year and I want to have all ties severed when I go.