HELP- Meeting w/sellers in the morning!! - Posted by Kristy

Posted by Kristy on July 04, 2002 at 10:32:43:

Don’t think they will go for that “Subject to” (yet) plus, I don’t think I want the deed yet. I figured in L/O there would be a way out if the economy goes to hell in the next few years. Has been great here for the past 10 years, but one never knows.

HELP- Meeting w/sellers in the morning!! - Posted by Kristy

Posted by Kristy on July 04, 2002 at 02:30:44:

First I am a Wholesale/Retail investor, this will be my first L/O deal- if it works.

Sellers have nice newer house (2300 sqft) in nice area that appreciates rather well. They have a 1st and a 2nd mortgage on the house Total $160K Which is what the house is worth now. Payments are $1250 per month. Now, they just moved into their Brand new home, so they will be having to make double payments very soon. They bought a new house for $208K (if that matters)

I need a couple of offer suggestions here.
I was thinking:
Offer them $160 purchase price,no money down, payments of $1250 starting in August with a 1 year L/O with 4 renwal terms. I would then collect $5,000 to $6,000 dn from Tenant/Buyer, get $1350 per month rent and sell for $173K to $175K. I would make the upfront money and $100 a month cash flow then another $5000 to $6,000 at closing.

Have I got something here? Any other EZ suggestions? I am meeting with the sellers in the morning and want to make them an offer or 2. Any help would be greatly appreciated!!
And yes, I have seen the house. Needs a refrigerator. That’s a whoping $300.00(not a big deal)

YOu pay 300 bucks for a fridge - Posted by waynepdx

Posted by waynepdx on July 05, 2002 at 09:45:51:

That is nuts.

Here is what I do.

I have friends that work for a large retailer appliance home delivery.

They haul away allot of old appliances, allot of them still in great looking shape and working great also.

When I need something, Fridge, Dishwasher, Washer or Dryer, or Stove.

I simply let them know and usually within a week it is produced. It costs me about 50 bucks.

Re: HELP- Meeting w/sellers in the morning!! - Posted by DB

Posted by DB on July 04, 2002 at 12:00:57:

Kristy, how much are each of the 1st and 2nd mortgage payments? If the second isn’t a whole lot, you could ask them to cover the second mortgage payment.

I believe when they got that second mortgage, it was called a “bridge loan”. We were working on a deal with a seller where he took out a second loan as money to put down on his new house. His payments every month with both loans were more than what the property would support for rent. We asked him if he was willing to pay off the second and we would cover the first. Of course, he didn’t go for it, but it was worth a try. Sometimes people will do that.

I would ONLY sign this one up for “mortgage balance at time of closing”!! I would NOT put the property under contract for 160K! Try to get them to cover August payment! This will give you some extra time to fill the property. We are already in July, that gives you 26 days to move this house before YOU need to make the payment.

I hope you have studied what other properties are renting for in your area. If the rent per month is too high, you will never get a buyer within the time you have to fill the property. Hope you can pick out some good points here.

Happy Investing, dave

Re: HELP- Meeting w/sellers in the morning!! - Posted by Larry in CA

Posted by Larry in CA on July 04, 2002 at 09:52:10:

Kristy, I hope the payment is PITI, if so, these are good low interest loans and are worth having. You need to get the deed into a land trust on this property and sell on a land contract for around $179,000 with 10K down and finance the balance at 9-11%. You get the downpayment, spread on the payment, and some backend money. Find a buyer for this before you commit, should be easy with the house vacant. Or if you don’t know how to do this kind of deal, any pretty house investor should give you a nice referal fee and teach you how to do these kind of houses. Hope this helps

Larry in CA

Re: HELP- Meeting w/sellers in the morning!! - Posted by Dan O’Connor

Posted by Dan O’Connor on July 04, 2002 at 08:01:00:


Will you be able to rent the house out for $1,350?

If not, I’d try to get the deed and sell on a wrap.Drive the point home about making pymnts on an empty house and that they have no equity. They may even be open to paying you to take it off of their hands.

Good Luck!

Dan O’Connor

equity cash out - Posted by Donald

Posted by Donald on July 04, 2002 at 05:53:51:


160k—Total liens

They ‘cashed out’ their equity with the 2nd mortgage. (they may have used the money to buy their new home)

Forget them and move on to the next deal.

my 2 cents


Re: HELP- Meeting w/sellers in the morning!! - Posted by Martin Greenberg

Posted by Martin Greenberg on July 04, 2002 at 04:46:25:

The lease/option might work here. I might go in to the negotiation asking for the deed subject to the mortgages first.

Re: equity cash out - Posted by Kristy

Posted by Kristy on July 04, 2002 at 10:25:38:

The house should be wroth $175K in about a year. They did use the 2nd to buy the first. However as I mentioned I did research on the market values in that area and they appreciate rather fast. I figured in 3 years it should be worth more than $175. Do you do L/O’s.