Posted by Vic on January 13, 2001 at 18:00:46:
…how much are you asking for the two houses?
Instead of selling cheap to an investor, why not put some type of ad in paper - 3 BR, appraised for 66K, will sell for 50K if closed in 30 days, owner may finance.
That’ll get your phone ringing & help you get them sold quicker.
Vic
HELP!!Going broke. - Posted by SherryW
Posted by SherryW on January 11, 2001 at 10:10:28:
New to this. Bought 2 houses in Aug. in the same wk. Great deals. Now, houses are remodeled and on market(1-house by a realtor, which contract ends this month.) Have interested buyer on 2nd home, waiting to hear from Mortgage Co. if buyer is appproved.
Used hard money to buy both houses and the interest pymts. and my own bills are making me late on my personal bills. I’m broke and barely holding on. Also considering taking a 10% take back second on the 2nd home but not real sure how to do this.
Waiting to hear if I can cash-out on 1st home and hoping now my credit is not crushed with slow payments the last 2 mos. so I can cash-out. If able to, going to lease option this home so I am back in business. I am having to pass great deals up till I sell these houses.
First home will net me about $28,000 excluding my closing costs.
Second home will net me about $15,000.
Did anyone ever go broke before they starting making good profits… Is there any suggestions on how to move houses faster. They both been on the market for almost 4 mos.
Getting discouraged. Trying to hang on.
Any suggestions on how to get over this slump so I can get started again.
Thanks, Sherry
Sell on Terms… Then Sell the Note. - Posted by Vince
Posted by Vince on January 14, 2001 at 13:56:07:
Sherry,
You could also try this:
Call some of the note buyers here on the board or on one of the other message boards here and determine their preferred way to structure a note that they would be willing to buy. They’ll recommend the down payment amount to ask for, interest rate the’re comfortable with, the balloon amount and when it should come due, etc.
Then, place a short ad in your local paper to sell the property on the terms outlined by your note buyer. Be sure to have a catchy headline like: "LOW DOWN, EASY TERMS, Nice 3/2 on beautiful tree lined street.
Once you finally have a qualified buyer (who bought because they got great terms), then simply sell the note to the note buyer and cash out. The note buyer will discount the note but if your buyer has decent credit the discount shouldn’t be too much.
The note buyers you talk to will give you even more creative ideas as to how you can move these properties. I’m a novice but these folks are serious pros. I recommend David Butler at NoteNetwork.com. Here’s really smart, talented and experienced and he might be able to help you.
His email is: dbutler@notenetwork.com
I wish you all the best.
Vince
Re: HELP!!Going broke. - Posted by Rick(CA)
Posted by Rick(CA) on January 12, 2001 at 19:36:00:
Have you also considered just trying to flip them to another local investor and giving up some of your profit so they don’t make you a VERY MOTIVATED seller?
I’d rather get something than go bankrupt or default on my loans. It doesn’t mean it will always happen to you. You may just be in a slump market, but if you wanted to unload them because of the payments, this is yet another option to you.
Just a thought.
Re: HELP!!Going broke. - Posted by steph in tex
Posted by steph in tex on January 12, 2001 at 07:25:01:
Sell 'em with terms! Do a Rent to Own! Offer to carry a 2nd! Get with a Mortgage broker and find out how to structure a no money down for people! You can move them if you set your mind to it!
Seriously,
if the homes are priced right, are in good condition, and you offer the right terms, there will be buyers.
You can offer to carry a 10- 20 % 2nd and move these to just about anyone. Can you give us values? Is there enough room do do this? If not, then Lease Option is a great move. Get 5K down with payments. Be prepared to take the house back a time or 2, but this is a great way to move property fast.
Good luck, & Keep us posted
steph in tex
Re: HELP!!Going broke. - Posted by carmen
Posted by carmen on January 12, 2001 at 01:23:05:
Im not an expert but would a lease purchase work? This way you have someone making the pmts thats is interested in buying. There are helpful arctiles on this website about doing so. Some sellers even help the potential buyers in clearing credit issues so they can get the house sold sooner rather than later.
Sherry, your post … - Posted by Vic
Posted by Vic on January 11, 2001 at 23:36:26:
…could have easily been written by me, almost word for word. So I really can feel where you’re coming from.
I have 2 houses that I bought in Nov. (within) 2 wks of each other. Neither has sold yet. Tons of inquiries,& lots of people wanting them, but have been having a real hard time getting buyers qualified. It seems they’ve all got some kind of a problem. It’s almost like it’s some kind of rut or something. I’m a real estate broker too & I have never experienced anything like this before. That’s why I say it must be some kind of a rut that I just have to wait out.
Usually when I’ve had this many inquiries, I’ve had the house sold by now, but for some reason these 2 haven’t sold. Naturally, these 2 houses would be mine & not client’s. lol.
Like you, I have one under contract & am waiting to see if the lender can get the loan through. The lender seems to think he can, but as he digs deeper, I’m starting to get a lil more worried. It seems that there’s more collection accounts than what first showed up on credit report. To complicate the situation, the buyers have no money & I mean no money. They’re going VA & have asked me to pay for the appraisal (so that could be another $370 out of my pocket & at risk if loan doesn’t close). Of course, I won’t do this until I know the buyers are approved credit wise. But still, it’s a risk & it’s money out my pocket.
Like you I’ve been sitting on these 2 houses, although for less time, but those payments are coming around every month & they are starting to really have an effect.
On the second house I was originally trying to sell it cheaper in it’s “as is” condition, but since I haven’t been able to, I’ve decided to go ahead & do the things it needs (mainly paint, carpet, etc) so that’s about another $3500 or so, out my pocket that I don’t have.
It seems like there’s no end to the money I keep putting out. So between the payments & everything else, it is really starting to have it’s effect.
I don’t want to sell either of these 2 on terms. I want outright sales on both, cuz I want the cash from them to give me some reserve for future deals. Plus I’ve got too much of my own cash tied up in them. I know they’re both going to sell, & I know that my price is right, so it’s just a matter of time.
My deals seem similar to yours in numbers too. On my first house I should net about $12,000 & on the second about $20,000 or so. I just hope I can hang on long enough to sell them for what they’re worth.
Although I can’t offer you any advice, other than if you want to sell owner financed, I can offer you emotional support & let you know there are others in the same kind of boat as you. Just try to hang in there & maybe next time you’ll have the cash from these deals to carry you through.
Keep me posted & let me know how you’re doing. BTW, are you sure you have your houses priced right?
Good Luck,
Vic
Re: HELP!!Going broke. - Posted by Kevin Subbert
Posted by Kevin Subbert on January 11, 2001 at 22:37:23:
Why not lower the price. If you lower the 1st $15000 and the 2nd $8000 you will still net $20000 minus closing costs and holding costs. Even if its only 10K profit, so what, that is alot more than going broke.
Kevin Subbert
Re: HELP!!Going broke. - Posted by Stacy (AZ)
Posted by Stacy (AZ) on January 11, 2001 at 14:47:21:
Is there enough equity to get a second mtg on either of the houses for “debt consolidation”? I’ve taken out second mtgs in the past on houses that were on the market. My bank will go up to 85% LTV for investment property. This way, you could pay your bills while the house is on the market, and just pay off the second when it sells. You’re just taking a piece of your profit early. Make sure there’s no pre-pay penalty on the second if you sell…or at least make sure any prepay penalty is small. Mine carry a prepay penalty for the first six months, but the penalty only amounts to a couple hundred bucks. My bank is Bank One, if it matters. No appraisal or loan costs. They go off what I tell them the house is worth. I imagine if you shop around you could find one for greater than 85% LTV, but watch the cost.
Good luck!
Stacy
Re: HELP!!Going broke. - Posted by phil fernandez
Posted by phil fernandez on January 11, 2001 at 10:35:32:
Sherry,
Offer owner financing and then sell that note to a note buyer at the closing table. An ad saying “Owner Will Finance” makes the phone ring.
Thank you everyone. - Posted by SherryW
Posted by SherryW on January 13, 2001 at 13:06:32:
Thanks everyone for your advice. I really received some good advice. I’m trying to cash out on (1) of the houses(need to find another lender)found out yesterday file has been sitting on someone desk.
Ruffled his feathers and should find out about the cash-out by Monday. I thought I had a buyer for the (2nd) house and lender told me yesterday the buyer’s credit was not good and unavailable to work with them.
Then just found out from buyer they were approved 80% from the lender. Sounds odd. That lender would tell me they were not approved. Because I will take back a 2nd. Plus, lender is going to market their trailer to help them sell it. Something does not sound right here.
How much equity should I leave in the house to sell to another investor? These 2 houses are in good rental neighborhoods. They are already remodeled.
!st house- 66,200 appraised value
38,000 balloon pymt. owed
2nd house- 44,000 appraised value
28,300 balloon pymt owed.
I pay high interest pymts. on both houses ea. month with balloon pymt dued in Sept.
Sherry