Posted by Tyler on May 19, 1999 at 22:02:25:
What discount are you referring to, Kevin?
NT
Has anyone ever tried this before!!?? - Posted by Tyler
Posted by Tyler on May 18, 1999 at 18:44:18:
Has anyone been successful trying this:
Put occupied MLS properties that you can buy at least 10% below FMV (may need fixing or not) on contract to purchase
THEN
Advertise and find buyers who don’t have 10-20% down (or don’t know that they don’t need that much these days) but have good credit. Do a simultaneous close with my buyer, deal structured AT OR SLIGHTLY ABOVE FMV, taking whatever they have down (5% or so), working with a broker who will arrange the necessary funding to cash out the Realtor and seller, and I carry back a second after the small down.
For example:
100,000 FMV
85,000 My purchase price
105,000 Sale price
7,000 Down
13,000 Note
80% new loan
14% 2nd carry back(me)
6% down pmt
Seems like I could do a lot of these, and it would be a way to work with the MLS properties. I’m trying to open up to a way to work with the MLS, without having to qualify for loans. I very rarely find listed props that a 65%LTV hard money loan would cover. At the same time, in my market, there are VERY few FSBO, limiting my business unless I can find a way to work with listed props. Suggestions?
If this would work…how would you market the property while it is still occupied by the seller??? Could you get around this, or would this scenario most likely only work with vacant homes?
What complications???
Thanks in advance, as always for the input…
NT
Re: Has anyone ever tried this before!!?? - Posted by Carmen
Posted by Carmen on May 18, 1999 at 23:27:59:
RE: the MLS
At least in Florida, the “list price” is only the beginning of the offer process. I have found several properties that would be under 65% LTV - but only after I offered 10-20K below the list price. Don’t be afraid to offer less - especially if you can close quickly (which most hard money can)! In addition, I try to be “the first or the last” - if you have daily access, I’ve found the best deals when mine is the first offer on a newly listed property (lowball, but quick close). Or, after the property has been on the market for a few months, and then they decide to drop the price (my MLS warns me when any changes occurr). Many of the other investors had their initial offers turned down - and probably are no longer looking at the property. Sometimes you’ll find that the same offer rejected 3 months ago will be accepted today - since they got no better offers, or they’ve REALLY gotta go NOW!
You only need one or two to accept. You just have to know what to search for - e.g. Handyman, Foreclosure, Must Sell, Desperate, Estate, and other such words will help you find distressed properties or distressed owners. Owner will Carry, Owner Financing, Will Consider Lease-Option, etc. are all good indications that the owners would REALLY like you to take the property and are open to some creative terms, even if they won’t sell the property for 65% LTV.
Have you considered closing costs? - Posted by Joe Kaiser
Posted by Joe Kaiser on May 18, 1999 at 20:05:57:
Closing costs consume 10% of the sales price in my area. You’d need a lot bigger margin to pull it off.
Plus, sellers will hate the fact that you’re tying them up and trying to make a fast buck off of their property.
Seems like a tough way to go.
Joe
Re: Have you considered the discount on the 80% note? - Posted by Kevin(OK)
Posted by Kevin(OK) on May 19, 1999 at 09:21:21:
Be lucky to get $75K for the first mortgage.
Kevin(OK)
Re: Have you considered closing costs? - Posted by V.P.
Posted by V.P. on May 18, 1999 at 21:08:51:
Joe,
That 10% you mentioned.Is that with realtor commissions?