FIRST DEAL-Help All- Need advice. - Posted by Len(NYC)

Posted by Len(NYC) on October 05, 2001 at 09:19:11:

Thank you for replying, I know what you mean about the sellers seeming unmotivated and just looking for a retail price, but I guess Im not expressing their motivation correctly. They want to move down souht in 3 months, I spoke to them again yesterday and explained to them that it wouldnt be in any of all our interests to try and sell the home for 255k (retail) or even 240k. I also had to remind them of the current market in the NYC area (world trade center) and how many people are hesitant to do any major purchases, and that the target group that I will be looking into selling to will be investors, and being that the case i would need the price to be more down. When they asked me how much , I told them that based on just jotting down some numbers off the top of my head, some where between 212- 230k. Which will leave them in the range of being able to leave with 50-60 g (159,500-215,00) I was surprised that they instantly didnt laugh and I guessed it helped that I mentioned the number of 50k or better.
They are pretty motivated and seem to even be open to the idea of taking a chunk of cash now and maybe taking the rest at later time, maybe 1-2 years later
(since I told them that might be how long it will take to have someone qualify) Again they were interested in that as well.
It seems they wanted to play high numbers in the beginning but after the fact of the market being the way it is, and the numbers of 50k in the bank , I could just smell their motivation.
So here are my options now , even though Im not a 100% sure of how to execute it.

home for 220,000…Get buyer to buy home for 230-235k.

Not sure what this would be considered but get buyer to put down 80k for home, give seller 60k and have the buyer take over the loan subject to. These numbers can all be played with of course. Since their mortgage rate is high at 10% Im assuming that who ever goes into this property would probably want to refinance.

Any suggestions will help, One more thing I have a person who has been looking into properties in the same area that im working on, and has just told me that he has 60k to put down as a down payment. The rest he would be willing to refinance. Interesting?

FIRST DEAL-Help All- Need advice. - Posted by Len(NYC)

Posted by Len(NYC) on October 03, 2001 at 21:47:05:

Hey Everyone,
Well I hope this will be the first one for me , so that i can get over this hump. Ok heres the deal, spoke to a lady last night that mentioned to me that she plans on relocating in the next 3 months. The home is a 2 family brownstone.

$159,500 ( 30 yr 10%- was previously 14% but after paying for so long they lowered it, Champion Mortgage)


Apraised July ’ 01
(brief comp search on-line showed homes in her area selling for 265,500 2/28/01, and 246,493 12/13/00)

All she really wants is to get the difference between 159,500-255,000(appraised) 100,000 was her first price, then she went down to 90,000. She wants to have the money to purchase a property once she goes away, but in the meantime she has family to stay with and also is aware that this is more then enough if not too much money. Im sure shell go down in price if its an all cash offer.

I mentioned two options two her on how I can aquire her property (ronLegrand inspired). First was a lease option, which would put a tenant into her property until they can qualify to buy her out. I didnt mention money up-front since I never read this to be part of a lease option deal, but in a way Im thinking that maybe that wouldve helped. Especially since the idea of a L/O seemed to fly with her, but the fact that no money was going to be had at closing ended that.
My second option was to option the house, I explained to her that this would be a contract for the next six months, and the only downfall would be that she would have stick with the payments.
She seems very open to ideas, since she does not want to fall victim to paying two mortgages at once, especially since they will start new jobs once they relocate.

Ok my thoughts…
Option the property for 159,500 mortgage
+75,000 seller
234,500 property
(spread of 20,500)

Or option the property for less 159,500 mtg
+60,000 seller
219,500 property
(spread 35,500)

Or assume the the mortgage(not sure if it is assumable, they mentioned that they wouldnt want to have two mortgages under their name) and take out a loan for 60-70,000 ( I dont even know if I can get this, but will call my bank, and a hard money lender) and take over a 255,000 property for 60-70,00.

Im sure they will consider owner financing, or at least be open to it if I can get them a nice chunk of cash to put down on a property , maybe 40,000 and the rest due in a year or two. The more Im writing the more Im doubting myself, any suggestions to just put my mind on the right track will be appreciated.

Would I normally be paying them for what the property is appraised at, instead of what equity they put into the property?
What more information do I need? I dont know how long she has had the mortgage, or how much equity she has in it?
Also, should I tell her to find out to see if her loan is assumable?
Since this is my first deal an option seems safest, but would you agree that if I can take out some money like 65,000 and offer it to her, that it would be good since I would have taken over her property worth 255,000 for 65k.

Please any help is appreciated. Thanks for all this site and its members have done and are doing.

Find the bottom line - Posted by BillW.

Posted by BillW. on October 04, 2001 at 22:46:30:

You need to find the bottom line with this seller.
You also seem to be possibly offering too much money.
The spread of 35K is looking good, but the smaller spread is asking for trouble , IMHO, and you should be careful here. The seller’s original asking of 100K over the mortgage showed that they are interested in a retail deal. You need to find their pain spot. If they’re not in any kind of a bind, there’s probably not much motivation. See if they will do a PACTrust type deal or possibly lease option for a couple years until you can take it out. Then sublease and be done with it. See if the seller will take a small (10K) down and monthly payments for their equity. Find what they will accept and se if you can make a deal with it.
From here though, it looks like they lack motivation.
Good luck,