Posted by dew on June 15, 2000 at 21:34:00:
YEah you could tie it up and make it contingent on you getting the Title Commitment. But see if Title Co. will do a verbal O&E, or if you know a Realtor that can get a verbal for you (here in CO I can get a verbal for free as a Realtor).
Ask your title company for a reference to an escrow company (3rd party).
Hey Pros, can I make this a deal? - Posted by Mel FL
Posted by Mel FL on June 13, 2000 at 22:26:11:
Im looking for a little insight on how to approach this property. Seems like it might be a deal, but Im not sure how exactly to approach it.
Comps say the property is worth about 75K maybe 80 on a L/O.
First mort. for 46K has high Int.(about 10%)and a 2000 pre pmt. penalty. Mo.Pmt is $444.34(P+I only)
Second is a line of credit, 20K W/ 300 mo. pmt.
Insurance is 350 per year, and taxes is aprox $1000
The house is newly rentavated but doesnt have CH/A. Its in a pretty sellable area, and a nice little house. But will rent for only about $700 per mo.
These are the offers that came to my mind.
First I could offer to L/O it, as long as he will feed about $100-150 per mo. so that rent would be low enough for me to make a spread. The problem with this is that #1 I dont know if he would do that. And #2 that line of credit scares me, he could keep spending and not have any equity.
Second is to ask him to use the line of credit to put in CH/A then Refi. Then L/O and pay his new lower pmt. Im not sure if he’s going to be happy about that either.
This guy isn’t desperate, he just wants to sell before he goes to boot camp in a month. He has also talked to a prop. mgt. co. and has considered it even though he would have negative cash flow plus repairs.
So my Question is, What way would be the best to go? Or does anyone have any suggestions for another aproach?
Thanks.
Verify if Line of Credit is a lien against property? - Posted by Soraya(SanDiego)
Posted by Soraya(SanDiego) on June 14, 2000 at 11:03:56:
1- Contact a title company and have them do a Pre-lim to determine if the Line of Credit is a lien against the property.
2- If it is a lien, then offer a L/O and have the seller cover the negative cash flow plus $100 or so for your spread. He basically agreed to that when he stated he may have a property management co manage his property. (i.e. negative cash flow, management fees, and repairs should come close to $144 per month)
3- If you do a L/O, ask Seller to put the property into a revocable land trust with him as the beneficiary. AND…
a- Have seller sign all documents necessary for title to be transferred to you, and have a third party escrow company or attorney hold these documents until the time when you exercise your option to purchase.
(He is in the Military and you may have a tough time finding him when you want to exercise your option. Plus if you have all the documents signed in advance, it will be harder for the seller to back out of the deal if he changes his mind about selling later on.)
b- PLUS have seller sign a performance mortgage (or performance Trust Deed) and record it.
Soraya
Re: Verify if Line of Credit is a lien against property? - Posted by Mel FL
Posted by Mel FL on June 14, 2000 at 16:53:01:
Thanks for all the advice.
As I mentioned in my response to Lori Im pretty sure it is. But if I do want to check it I guess I have to go down to the courthouse. I guess I havn’t done enough business with my title co., they charge $100 for an “O and E”. Couldn’t I just assume he’s telling the truth until we have a deal then have an “O and E”? It sure would be time consuming to research every fact about every lead. Is there a faster way that I don’t know of?
Also what kind of companies hold docs in escrow? I asked an attourney about it and he said that he would have to draw up the escrow agreements and that would
cost me “his standard fee” of $200 an hour. Would that be the same co. that would be “a third party” that would accept payments then pay the Mort.pmt.,funishing all parties with a statment?
In the past three L/O deals I did I am just making the pmt. directly to the bank. But in this case, with him being so far away he doesn’t like that idea.(Can’t say I blame him.)
Thanks for the response, the advice I get here always seems to be top notch! (your not gonna bill me are ya’) 