Creative Input, Please! - Posted by Karen (NY)


#1

Posted by Darin on January 28, 1999 at 20:56:58:

Dont get so tied up in conversations. Write an offer and get the ball rolling.

People say one thing but accept another on paper.


#2

Creative Input, Please! - Posted by Karen (NY)

Posted by Karen (NY) on January 28, 1999 at 20:39:23:

Hi all-

I’ve been speaking with a woman who is selling her mom’s home–mom is in Florida. I originally spoke to her about LO. She was interested, but mom wasn’t. She has been advertsing the house in the local paper for months. It appraises for $64K (my Realtor friend thinks that’s pretty accurate) but they’re asking $46K. Her mom just wants it sold. The daughter was going to show it to some people who called on her ad this week–none showed up. The tenants have no phone, no job and haven’t paid January’s rent. I’ve developed a good rapport with the daughter and will meet with her this weekend. She is fed up and is done trying to sell/manage the house for mom.

Details:
purchased in 1992/1993 for $69000
payments (PI) approx $725 (renting for only $500)
mortgage balance approx. $39000 (6-7 years remaining)
(I’ll get concrete numbers this weekend, but playing with my financial calculator, they do make sense. So I think they are at least close.)

This is a cute house in decent condition, good school district, nice small village. I think it would be easy to LO or owner finance to an end buyer.

I’m trying to work on some options to offer this woman on Sunday. I was hoping some of you creative geniuses could offer a suggestion or two. Please note–I don’t have much cash to throw at this, as I’m trying to get my first deal.

Thanks,
Karen


#3

Re: Creative Input, Please! - Posted by Sean

Posted by Sean on January 29, 1999 at 09:41:10:

I say go straight for the throat. Offer to take over the payments on the loan and they pay the closing costs to get rid of the unit. If the loan’s not assumable, who cares? The lender is likely to work with you, or you can refinance/flip.

If that’s too aggressive for you, offer to lease-option the house for the PITI amount and work on getting those tenants out. Gargle with some alcohol and slosh some on you and go over to see the tenants.
Tell them you’re the new landlord and they’ve got to be gone. Offer them $$$ if they can be out in 24 hours. Act drunk and/or a little bit crazy. Ideally you should have the $$$ in your pocket and “forget” the right amount. Take out the money and a gun (if it’s legal) and count the money slowly. Get mixed-up a couple of times and recount it, then loudly declare how much it is. Put the gun away, brandish the money and offer them the $$$ if they have their stuff out immediately. Say you’ll be back in 24 hours to give them the money.

The unit is priced really low, but that probably is a result of you being in a rent control area (are you?) If that’s the case the $500/month tenants are a serious liability since you won’t be able to raise the rent enough to cover your expenses unless you can get them out. IF THAT UNIT IS COVERED BY RENT CONTROL YOU SHOULD NOT DO ANYTHING UNTIL YOU CAN BE SURE YOU CAN RAISE THOSE RENTS!


#4

Somethings wrong. - Posted by Andrew Smith (Phila)

Posted by Andrew Smith (Phila) on January 29, 1999 at 07:59:13:

If they have been advertising a $64,000 home for only $49,000 and they have been running adds for months - something is wrong. You need to know why the home hasn’t sold. There could be a very good reason from your perspective. For example, I once purchased a home that was rented out at a below market rent where the tenants did everything they could to disgust people. They would leave trash and garbage out and not flush toilets. It was disgusting but it was also very easy to remedy. On the other hand, you need to be careful. How familiar are you with the neighborhood? Is it stable or declining? Has a large company in the area closed? You need to know why that house hasn’t sold. The answer may mean the difference between making a profit or taking over their headache. Good luck.


#5

THE PRICE AIN’T RIGHT… - Posted by LA

Posted by LA on January 29, 1999 at 05:57:55:

Remember this: ANYTHING SELLS AT THE RIGHT PRICE.
Sounds like the asking price is to high & the rental price may be too high also.
Learn to LISTEN to the MARKET !
If no one showed up…that means that the price is way too high ! And that goes for rentals too.
I would suggest marketing the property as a rental & for sale at least five different ways with 3 to 5 different prices & see what CREATES the highest demand.
Remember: The market NEVER lies to us…the only problem occurs when we lie to ourselves about what we think.
Sounds like “moms” needs a price “reality” check.

LISTEN TO THE MARKET & U can’t go wrong.

Just my .02