HELP a newbie! IDEAS,advice NEEDED badly! - Posted by Angela

Posted by angela on July 02, 2002 at 08:51:09:

They already think I have access to money because she responded to an ad about my partner being able to help people who normally can’t get approved with financing for mortgages. I just started asking her questions and she started spilling out info.Also,from the tone of her conversation to me,they’re thinking the parents are greedy for not ripping up the lien after they said the whole purpose was for protecting their son and the home,initially.I’m thinking that they’re not on the best of terms,lol.So,in addition to this potential deal,she’s also hoping that my partner and I will be able to help them with financing on the home in the new city where they wish to relocate.The parents will have the letter in about 15 minutes,if they’re home. I will try to call them this afternoon,if I can find their number.:slight_smile:

HELP a newbie! IDEAS,advice NEEDED badly! - Posted by Angela

Posted by Angela on July 02, 2002 at 24:20:16:

The owner of a house in Mass. notified me. They are trying to relocate and need to sell their house asap and need the profit from the sell of the house to move.The thing is,the house has been paid off for years.The parents of her husband took out a lien on the property for 100,000 when he was divorcing his first wife,so that the wife would not be able to get the house in the settlement. After he signed it,they decided to keep it in effect. BUT! It’s not due until 2015.I had her fax me a copy of the lien and the due date is actually that far away.There is no interest or payments due on the house until that 100,000 in 2015. The house is listed for 155,00 (100K-lien,and the rest is what they were hoping for DOWN,to pocket).It has a private lake and 4 bedrooms and includes the boats.It needs carpet and paint.Besides talking them down from the 55K they would like,how would you all approach this? The lien has been in effect since 1996.I did a search on the neighborhood and one site said the median price of homes there was 123K and another said 167K.She initially approached me about helping with financing for a home when they find it in the new city, but if they don’t sell this house,they won’t get there or have any money if they do.Any suggestions?

Re: HELP a newbie! IDEAS,advice NEEDED badly! - Posted by michaela

Posted by michaela on July 02, 2002 at 06:47:04:

what are you planning to do with it? lease/option? straight out sale? rent? the comps are really important. you want to work backwards. drive around and call on any ‘for sale’ signs, that are in the neigborhood and ask for listing details to get an accurate idea about the value.
maybe they’re willing to give you a 2nd with monthly payments, which would also help them buying a house, instead of a lumpsum. you could then rent the house and cover those payments and have positive cashflow.
or lease/option it. before an actual sale you could call the parents and ask them whether they’d rather have 70k now or 100k in 2015. what do you think they’d say? you can make this a good deal
michaela

Re: HELP a newbie! IDEAS,advice NEEDED badly! - Posted by GL(ON)

Posted by GL(ON) on July 02, 2002 at 06:39:17:

What are you after here? Do you want to buy the house to live in, flip it, or what?

That’s a real cool lien (mortgage) you have there.If there are no payments or interest, you could actually buy the place, sell it on a wraparound mortgage for the same price you paid, and make money on the payments.

You might talk to them and find out how much cash they need. Maybe they would take back a small second. Do you have any money for a down payment, or can you raise it?

It’s worth pursuing if you could buy the place and collect interest on someone else’s $100,000 for the next 13 years.

Re: HELP a newbie! IDEAS,advice NEEDED badly! - Posted by angela

Posted by angela on July 02, 2002 at 07:59:38:

well,im so far away so I’m not sure about being a long-distance landlord,but it is tempting when I think of getting a monthly payment and pocketing extra cash a month.If I could rent it even for 1K a month,in 12 years,that’d be 144K with interest growing on it,and then paying that 100K lien would be nothing,but that’s assuming I had a stable steady renter.I could rent it as much as possible and then sell it if I ran into renter problems,and pay that lien off and pocket the extra.If I lease option it,the extra down payment and extra a month would be good,but 12 years is a long time…I sent the parents a letter and am waiting to hear back from them about receiving a lump sum now!. ARGHHH! It’s a matter of trying to weigh my options to see what avenue would lead me to the most profitable position.This would be my first deal and I’m trying to remember everything I’ve read,good and bad ,to figure out the best way to do this.

Thx Michaela

Re: HELP a newbie! IDEAS,advice NEEDED badly! - Posted by Angela

Posted by Angela on July 02, 2002 at 08:07:30:

I definitely don’t want it to live in,I like NYC…I thought about flipping it,just to get rid of it,but then I started thinking about whether or not that way be the most profitable.It would be the easiest,but the no payments,no interest thing is so tempting.I have no money but I think I can raise it.It would be nice to have a free and clear house I could do whatever with,but the only way would be to get rid of that lien which would put me in debt to whoever lent me the cash so in essence it wouldnt be free and clear,unless I used the rental money to pay back on the loan.I’ve been thinking so hard,I might not even be making sense anymore.Thanks though,GL! :slight_smile:

Re: HELP a newbie! IDEAS,advice NEEDED badly! - Posted by michaela

Posted by michaela on July 02, 2002 at 08:19:24:

angela,

i would do the deal first before i approached the parents, because everything you say/write will go back to the sellers (because i’m sure the money will go to them anyway) and you don’t want them to think, that you have all this money laying around. if you can do with not having to come up with more money up front than you can come up with, then it sounds like a sweet deal.
if you don’t want to be a long-distance landloard, then lease/option it for a year or 2. only contact the parents when you’re ready to pay off, otherwise it’s like yelling ‘fire’ for practice. you don’t want to get their hope up and then they’ll hold a grudge against you when it’s real.
also, i would suggest to rather call them, instead of
writing. (unless they’re unlisted you can find their ph# on www.searchbug.com by searching by address)

michaela

Re: HELP a newbie! IDEAS,advice NEEDED badly! - Posted by GL(ON)

Posted by GL(ON) on July 02, 2002 at 14:06:55:

Why would anyone pay off a loan of $100,000 with no payments and no interest?

The interest on $100,000 at 6% is $6000 per year.

If you buy the place, and you can keep that mortgage, then resell on a land contract, you can collect that interest.