Help! I need some advice on this deal. - Posted by John

Posted by JohnBoy on April 03, 1999 at 11:19:47:

Tie it up with your contingencies for 45 - 60 days to close. Put the right to show the property in your contract. If the house is vacant put a clause in your contract that says sellers will give you a key to the property so you can have access to get in to show your contractors, appraiser, prospective tenants, etc.

Then advertise it with seller financing. Find a buyer that can qualify for a new 80% first with you carrying back a second. 80% of $79,900 is $63,200. $63,200 - $50,000 = $13,200 in your pocket at closing plus you will have a second at $16,700 you will collect monthly payments on. Find a good mortgage broker to work with that has good programs available to get your buyer funded.

Another quick way to close on this would be to use a hard money lender. $50k is only 62.5% of FMV. Most hard money lenders will loan up to 65% FMV. A true hardy money lender won’t ask for credit, income, job, etc. They only care about the property, not you. If they care about your job history or credit then they are NOT a true hard money lender.

Sounds like a nice deal. Get it under contract quick before it’s to late. As in, go tie it up NOW! You can’t steal in slow motion.

Help! I need some advice on this deal. - Posted by John

Posted by John on April 03, 1999 at 10:17:40:

Ok, here’s what I have.

A 3/1 SFH in good shape. FMV $79,000. It was listed for $79,000 and was reduced the other day to $69,000. I offered $50,000 cash. Sellers countered with 54,000 and will not budge. The realtor will not allow any “playing with the numbers”. Realtors kill deals because they refuse to think. The home needs very little. Maybe $1000 in cosmetic work.

Ok, here is my question, what ideas can you guy/gals through at me to get the deal financed. I can inject a few thousand dollars into the deal, I have good credit but I have NO JOB. I was laid off in January, and I am never going to get another JOB again. I am doing REI full time now.
I have 5 other properties with 15 to 20% equities in them that I could use if needed. The sellers will not take a second mortgage. This property was willed to the sellers and they want to cash out. I will try to get them to hold some money if that is the only way I can do the deal.
Now, my exit strategy would be to L/O the property or sell it on a wrap with a contract for deed.
Could anybody help me figure out how I can get in the “front door”. Is the deal too skinny? It looks ok to me but if I subtract loan costs and holding costs, it could start to look skinny. The market is hot here. I could sell it fast at 72,000 with some advertising and some clean up (curb appeal). I can L/O it for around $83000.
I would appreciate any help, comments or input, even if you think it is a “no go”.
Thanks so much. I really appreciate the time all you guys/gals spend to help me and other newbies out. I also appreciate this site. Thanks JP!

John Bittel

PS: just wanted to send out a thank you to Ed Garcia.

Re: Help! I need some advice on this deal. - Posted by phil fernandez

Posted by phil fernandez on April 03, 1999 at 12:15:10:

Hi John,

I don’t think this deal is skinny at all. FMV $79,000. Seller has agreed to sell for $54,000. That’s a nice spread.

The key problem for you is how to get your seller the $54,000. How about wholesale flipping it. I’d try to get as long a timeframe as possible before you have to close. Could you get 90 days?

" The realtor will not allow any playing with the numbers " What does that mean. It’s not the realtors house. That’s a decision that would be made by the owners. You might need to sit down with the sellers to get more input as to what there needs are.

You mentioned its an estate deal. How many heirs. If there were two perhaps one of the two would be willing to hold their share in the form of a note.