Posted by Andy - MI on February 19, 2000 at 20:37:06:
First, I have to say that you have an interesting name given the nature of our business.
Now, down to business: You can easily figure out the payments on your contract with an amortization table. Mortgage calculators are plentiful on the web. E-mail me if you need the URL’s.
Next, you’re talking about rehabbing. I don’t see where there would be anything wrong with turning around and selling, but I’m not an expert.
You might want to think about certified mail for getting a hold of the owners.
Have a couple of newbie questions… - Posted by Charity
Posted by Charity on February 19, 2000 at 20:17:04:
I don’t really understand how this owner financing thing works that I read about in the Carleton Sheets and other courses. For instance, he’ll say something like “Ask the owner to take back $30,000 of the purchase price at 10% interest with payments of $200 a month.”(These numbers I pulled out of thin air) But I can’t figure out where he gets the numbers. As an example, let’s say I find a property and the owner is willing to do 100% financing and the price we agree on is $60,000. How would I go about figuring my payments if the seller wants 10% interest?
Number two: If you agree with a seller or even a private mortgage investor to take a loan in the amount of, say, $45,000 for 10 years at a certain rate of interest and one of the plays you use is to explain how much money they will make over and above the loan over 10 years. Well, if you decided to rehab the property and sell it 4 months later, can you do that?
Third, I subscribe to my city’s Foreclosure Report that comes out monthly. I am having a difficult time getting any info from the attorney and I can’t find the owner’s numbers most of the time. Short of going to the door, is there anything I can do?
Re: Have a couple of newbie questions… - Posted by JoeB(Atlanta)
Posted by JoeB(Atlanta) on February 19, 2000 at 22:08:09:
Just adding to Andy’s comments-- you could payoff a 10-year loan early, even after 4 months…just beware that if the lender is sophisticated (ie some private lenders and certainly most institutional lenders) they may have a pre-payment penalty in the note/mortgage.
This means that if you payoff the loan very early (usually in first year or two) then you’d be subject to an extra 1% to 3% as a penalty for the lender not getting ‘enough’ interest from you. This should almost NEVER happen when you’re getting seller financing, since you (or your attorney) should be drawing up the note/mortgage.
Re: contacting pre-foreclosure homeowners–you can often get a phone number by using a ‘reverse search’ (ie typing in the house address) in lots of the Phone Disc software or I think the www.infospace.com site allows you to do this, too.
Also, could try mailing a postcard/letter to property address and getting owner to call you. BUT, most people I know who make lots of pre-fc deals right before auction do it by knocking on the homeowners door (but be prepared for some serious rejection).