Help Please! - Posted by lucky


#1

Posted by SCook85 on October 26, 1998 at 22:17:56:

Lucky,
You never mentioned if the owner is going to finance the deal himself. I assume that he is if he is looking for $5k down. You say that you want to get your $5k back, but when you talk about your lowball offer and refinancing you seem to want a lot more than $5k back. You need to decide what you really want to do.
Do not get hooked on the property. You need to find a motivated seller which the one you are dealing with does not appear to be. Don’t get caught up trying to make a deal with someone who does not want to deal. Make an offer that works for you. If they don’t accept it, move on.

SCook85


#2

Help Please! - Posted by lucky

Posted by lucky on October 26, 1998 at 20:35:51:

I’m concerned about a first time ever offer and would like some advice please. Here’s the deal: This is a duplex in an older area that brings in $800. per month. The asking price by a fellow that just fixed it up for a sale is $48K. This is the general asking price for the area. The place is in good shape with new roof, wiring, paint, and some plumbing. He needs 5K down (the problem). I can do it with a line of credit, but with debt service (10% for 20 years and the 5K loan, things look no better than $50 net per month and the property would be at market price.

I want to get my 5K back if I give it to him and the only way I can figure that would be to offer $40k with 5K down leaving a $35K balance which I could remortgage for the new appraisal of 48K giving me enough to pay seller off, my loan off, and put $7K or so in my pocket. Problem is, I think the offer is low. Bottom line is that I either want a good positive flow or my 5K back.

Please – I know I’m missing something here – the seller is a hard investor and thinks his offer is good (of course he’s greatly underestimated costs and doesn’t know I’d have to borrow the 5K.

Suggestions Please?


#3

Re: Help Please! - Posted by Joe Kaiser

Posted by Joe Kaiser on October 27, 1998 at 04:20:35:

If he’s motivated and this really is the property to buy, tell him you’ll pay him the $5k as “prepaid interest.” That way, he get’s the $5k down payment he needs and since you won’t have to make payments for a year, you’ll get it all right back.

He gets a note for $48k, plus $5k down at closing. Doesn’t sound half bad.

Joe


#4

Re: Help Please! - Posted by KE

Posted by KE on October 26, 1998 at 23:33:00:

I presume you are talking about initial seller financing, then re-financing with a bank? In my area, the bank will only loan 70% of the appraised value for investment properties, so you might want to check with your bank on the loan value.

In lieu of money down; if the seller doesn’t really NEED the cash, perhaps he would accept a higher selling price or a higher interest rate with no money down. This could work to your advantage to avoid the money down issue.