Posted by IB (NJ) on July 15, 2003 at 07:47:30:
Option 1 sounds lie your best bet. I would have option 2 ready with an assignee (or someone willing to pay the referral fee) waiting in the wings.
But if you do go with option 1, it might be best for you to have a buyer waiting on the other end. It could be tragic if you had an investor(s) put their money up but couldn’t get rid of the property. Know your market well, young Jedi…
Closes Friday - financing fell through - Posted by Dave
Posted by Dave on July 15, 2003 at 06:57:21:
I am trying to buy a duplex and resell it. Not very creative but the seller is motivated and is willing to give me a discount because he needs the money now.
Selling price $67,000
Value of property $80,000 - $85,000
Seller clears $450/mo
I brought a friend in to finance it but the mortgage insurance organization in Canada will not insure the mortgage unless he has $100,000 in liquid assets. The bank is willing to loan the money if he can avoid the mortgage insurance organization. This is accomplished by putting down 35% of the selling price or $23,450.
Here are what I see as my options.
Bring in another investor with $11,000 and we can buy it.
Pass it to another investor and collect a referral fee.
Find a hard money investor - they usually want half the profits here in Canada.
Would anyone like to wade in and give an opinion on the option they would choose? I am thinking of pursuing option 1 and try to raise the money to buy it.
Thanks, Dave
Re: Closes Friday - financing fell through - Posted by GL - ON
Posted by GL - ON on July 15, 2003 at 09:17:14:
If you are going to resell it why do you want it in your name? Use a Contract for Deed, or Agreement of Sale, Long Form as we call them in Canada.
Tie the place up for a year or 2, and resell it within that time. You will save a lot of money in closing costs, and a lot of hassles.
If you really want to do it the hard way and buy it outright,ask the seller to take back a second mortgage for $11,000.
After all, he is getting $56,000 cash between the first mortgage and your down payment.
If he is committed to the deal then he should have no problem with this.
By the way you might be better off to put the mortgage on your house or your partner’s house. The bank tends to get icky if they find out you are using a second to buy the property but if it is on another property it’s OK.
You can move the mortgage later if you want.
If this won’t work don’t sweat it. If you have to put up a lot of cash, the deal wasn’t that hot anyway.
Re: Closes Friday - financing fell through - Posted by RichV(FL)
Posted by RichV(FL) on July 15, 2003 at 07:56:56:
Dave,
If it were me doing this deal I would most likely lean towards option 1.
Regards,
RichV(FL)