Financing - Posted by Charles

Posted by charles on March 07, 2001 at 19:27:59:


Thanks for the response. Nix the house I was talking about. Her agent told her not to do it. But as I said this town is littered with houses for sale. I found a FSBO in a neighborhood of older houses (read solidly built with real walls and hardwood floors) for $44,500. The house is paid for and every thing is functional. The selling price is based on an appraisal (that’s what I was told). The bathroom (3BR/1BA) needs some tiles replaced and the attached garage is full of junk. The house has no apparent major defects but could use some cosmetics like a new kitchen floor etc. It also has no appliances. Supposedly the appraiser told this older lady (her daughter has gray hair and her husband died 6 months ago) that if the bathroom were redone the appraisal would go up to $55,000. Around these parts attached garages regularly get turned into a den.

(Please bear with my rambling because I don’t know which info is relevant and which is not.)

It seems to me that the house has alot of appreciation potential which could figure into the financing (Maybe an 12 to 24 month balloon mortgage which might allow me to get money to finish the garage, fix up the bathroom and appreciate the house substantially allowing me a better chance to get a bank/finance company loan?)

By the way the house has a big fenced in backyard and the neighborhood park (a nice family friendly place) is in viewing distance from the front porch.

I’m married with 3 boys ages 9, 8, and 3 and we need this house to live in and I don’t want to rent any more. The lady likes us alot because were “good christian folks” who act as responsible parents (we homeschool) so I think she might go along with something unconventional. She’s also aware (having lived in the house for 20 or more years) that there are houses (plural) on her very street that have been up for sale for two or more years and haven’t budged.

Sorry if I said too much.

Where do I start?


Financing - Posted by Charles

Posted by Charles on March 04, 2001 at 08:23:09:

I’m less than a novice in CRE. Bear with me. I live in a single wide trailer in Jerry’s World (Springer…that is). At any rate there’s a house I was looking at renting in Sept 00’. The lady was very interested in renting to my wife and I but felt like she had to give it to a family who was “first in line”. It ended up being a landlord’s worst nightmare with destructive, criminal children (as in police visitations), doggy damage, etc. I happened to stop by the house about three weeks ago and she said she was going to sell the house and be done with the headache (she lives three hours away). However, after lots of talking on her behalf she told us to stop back by the next weekend. She basically made verbal arrangements to rent me the house on her own initiative but I told her I’d like to move toward buying but my credit wouldn’t allow me to go get a loan immediately and explained a lease option to her. She liked the idea but by this time had gotten her “friend” a RE agent into the mix, who of course wants to sell the house conventionally to get her commission ASAP. She is a little old and a little sickly and figures she has a month more of clean up and repair to do (probably at the suggestion of the agent to prep it for the traditional RE market). I could do these minor repairs and this carpet deodorizing myself. Plus I could give her a deposit and three months lease payments immediately.

What I want to know is about financing sources I’ve heard of who after one or two years of on time lease payments will finance 85-90% (or some percentage) without credit report considerations or only looking at the one or two years previous to the purchase date at the end of the lease. I think if I could show her that’s possible she might go beyond the advice her agent is giving her.

Also, I live in a town where all the middle class kids have gotten educated and moved away and as their parents die out the houses they grew up in are sitting on the market for years (literally), so there’s at least the chance that her house could sit on the market for years. Help!


Re: Financing - Posted by Ed Garcia

Posted by Ed Garcia on March 04, 2001 at 10:32:38:

Good morning Charles,

When you mention, cleaning up your credit in the approximation of 2 years. I agree with you that it can happen, but the borrower has to make it happen. It’s not by chance. The borrower has to remove the previous bad credit and establish new credit by charging small purchases. For more information, visit There you will find out how to remove items from your credit report and what you need to do to improve your credit. It even has a credit repair kit for free.

Charles, you haven’t told us what the house is worth? What she owes? Or what you want to pay for the house? That’s important because there may be a way you could buy it now with a seller carry-back. To know what the lady owes is important because we can structure a deal around that. Also put into her head that you may save her time and money by (1) fixing up the house yourself, with her not having to spend a dime. And (2) Saving her a Real-estate commission.

If you like, you can find out the information that I’ve asked and get back to me, then we can go from there.

Ed Garcia