Posted by JoeB(Atlanta) on February 01, 2000 at 21:55:41:
I agree w/JimIL 's post, but I’d also add a side note:
Many loans are “assumable” WITH QUALIFYING, as opposed to the investor’s favorite NENQ (non-escalating, NON qualifying).
Non-qualifying loans are usually FHA and VA loans which were originated before 12/89 and 12/88??(not sure on VA). So, if you’re considering assuming this loan make sure it’s a true NENQ loan.
Joe Brillante
FIRST DEAL!!! - Posted by Pavon Bailey
Posted by Pavon Bailey on February 01, 2000 at 15:05:15:
Fellow investors!!!
I need some assistance, please. A house is being sold in a desirable neighborhood for 150K. I called the seller; he is VERY motivated (needs to move…must sell home ASAP!!!). The home is located around a hospital, a few restaurants, and the crime level in the neighborhood is VERY low, almost nonexistent. Here’s the kicker: I don’t have perfect credit, and the seller told me that his outstanding loan for $110K…is ASSUMABLE!!! Interest Rate…6.5%!!! Can YOU BELIEVE IT!!! Anyway, I called an investor that buys houses in that neighborhood ALL CASH!!! The comps came back and he said that the house is worth $225K!!! Repairs? Just a few cosmetic work i can tackle on a weekend. The home is in move-in condition. QUESTIONS:
A) Any advice from the real pros out there on what type of offer I should make?
B) From the figures, how much should I be able to cash out from this deal??
Any assistance will be greatly appreciated!!! I seriously don’t want to lose this deal! But before I write up an offer, I want some advice. Thank you.
Pavon
PS: TO JP: Can I pay for the Convention in installments, JP?? I’ll give you a note for $595 payable over 300 years at 112% interest! Collateral: My college degree once I get it next semester!!! Just kidding! smiles
Re: FIRST DEAL!!! - Posted by pros77
Posted by pros77 on February 03, 2000 at 22:42:59:
THERE IS A WAY TO DO THIS DEAL AND YOU BOTH WALK AWAY
HAPPY.IT LOOKS AS IF YOU NEED 65%-70% LTV TO MAKE THE LOAN WORK.
THE HOUSE IS WORTH 225,000
HE WANTS 150,000
IF YOU GET A LOAN FOR WITH 70% LTV
THAT GIVES HIM 157,OOO
THE REMAINDER CAN BE FINANCED IN MANY WAYS.
WHEN YOU SELL THE HOUSE YOU CAN MAKE UP TO $67,000
IF YOU HAVE ANY QUESTION, OR NEED HELP WITH THE STRUCTURE OF THIS DEAL E-MAIL ME/ pros77.@aol.com
Keep this in mind- even if your credit is bad a bank
wont turn down the deal because your not asking for much,and there is a lot of equity in the property…and by giving him 7,000 extra than what he ask for it will easier to talk him into paying closing cost!
Re: FIRST DEAL!!! - Posted by Jim IL
Posted by Jim IL on February 01, 2000 at 17:02:53:
Pavon,
If this were a home I found, I’d do this;
Make multiple offers, all that work for you.
Make sure the comps are correct.
Is the $225k really a good number?
If it is, then offer the seller a few different offers, and let them decide what works.
try this;
ALL CASH OFFER @ $130k (this is less than 60% FMV, so you have some room to move up.)
If this is accepted, write the offer to make the closing date as far off as possible, and obtain either hard money or another investor to flip it to.
Offer the FULL ASKING price, or close to, but on terms. As in a L/O, with rent being a payment under market rent for the area, and your contract payments do not commence until you secure a T/B’er.
Offer some other terms-
Land contract, or sell it to you on a wrap mortgage, with a balloon due later that cashes him out, but leaves you room to sell for more.
And, if the guy really needs out now, take the home “Subject to” the existing loan, but do not assume it.
Find out specifically what the seller needs, and if you can give him that and leave room for your profit, you have a deal.
Hope that helps,
Jim IL