This guy happened to be self employed and only showed about 26k a year. He also only had 16k to put down. No broker i know could do this for him. The house happened to be a very nice one and his wife loved it, therefore they were willing to pay a little higher rate. 11% is not unheard of nowadays although i usually do it at about 10%. Selling that note at 100% of face value is no problem. Its a matter of dealing with the note buyer not a broker. If you dont have the confidence that you will be able to sell it at that yourself compensate for it somewhere in the deal.
As far as those loan programs your talking about…Not one out there for a guy who wants to purchase a 165k home and shows 26k on his taxes and only has 16k cash and self employed and new to town. And if there was one i bet it would be at least 11% and he would need to put at least 20% down.
Glad you liked the deal.
Gino
ps: I try not to deal with banks anyway, too much red tape and you can rarely get a deal like this done in 2 weeks, which is what i needed. Since my buyer had to move out of his rental.
This guy happened to be self employed and only showed about 26k a year. He also only had 16k to put down. No broker i know could do this for him. The house happened to be a very nice one and his wife loved it, therefore they were willing to pay a little higher rate. 11% is not unheard of nowadays although i usually do it at about 10%. Selling that note at 100% of face value is no problem. Its a matter of dealing with the note buyer not a broker. If you dont have the confidence that you will be able to sell it at that yourself compensate for it somewhere in the deal.
As far as those loan programs your talking about…Not one out there for a guy who wants to purchase a 165k home and shows 26k on his taxes and only has 16k cash and self employed and new to town. And if there was one i bet it would be at least 11% and he would need to put at least 20% down.
Glad you liked the deal.
Gino
ps: I try not to deal with banks anyway, too much red tape and you can rarely get a deal like this done in 2 weeks, which is what i needed. Since my buyer had to move out of his rental.
Posted by BankRobber on February 28, 1999 at 22:24:05:
I agree, I can not see how a Seller who understands the time value of money would agree to this arrangement. Obviously it could only be structured on properties where the Seller had a considerable equity position. But my biggest problem with this plan is the security arrangement that would be neccessary between the Seller and the Middleman Buyer/Deed of Trust holder, and the possible problems that would result if the 2nd Buyer defaulted on the Deed of Trust. A default by the 2nd Buyer and subsequent foreclosure on the 11% Deed of Trust might cause the delayed 136K payoff to the original Seller to be accelerated. And/or there might be some liability to the purchaser of the 60 payments.
Posted by BankRobber on February 28, 1999 at 22:24:05:
I agree, I can not see how a Seller who understands the time value of money would agree to this arrangement. Obviously it could only be structured on properties where the Seller had a considerable equity position. But my biggest problem with this plan is the security arrangement that would be neccessary between the Seller and the Middleman Buyer/Deed of Trust holder, and the possible problems that would result if the 2nd Buyer defaulted on the Deed of Trust. A default by the 2nd Buyer and subsequent foreclosure on the 11% Deed of Trust might cause the delayed 136K payoff to the original Seller to be accelerated. And/or there might be some liability to the purchaser of the 60 payments.
Posted by BankRobber on March 01, 1999 at 11:50:38:
I read your original post the same way Irwin did. In your original post you say “I” write the note, “I” sell the payments, “I” sell the balance. Nowhere in your original post do you say that the “Seller” is carrying back the Mortgage. Thank you for clearing that up.
Re: How i paid 125% of FMV and made $17,000 - Posted by Ed Garcia
Posted by Ed Garcia on March 01, 1999 at 11:52:01:
Gino:
You blow me away.
How can someone structure a deal like you just did, and know nothing
about financing.
Financing is so available it?s unreal. I just did a deal last month with
100% financing, stated income with bank statements on a
self employed buyer at 8.875%.
The way you structured this deal is cute, but is the exception to the
rule, not the rule.
To orchestrate a buyer and seller like you say you did was well done.
But to say financing has too much red tape after going through what you
just did with a buyer and seller, something is missing.
Gino, I thank you for sharing the creative way you have structured your
deal. However I would also like to suggest that if you would take a little
time to learn more about financing, you would be awesome.
Sounds like a great way to put self employed buyers into homes. All I need to do is locate the good people with mattress money, and find the right home to structure the deal around.
Thanks Gino
Sounds good, can’t wait to find someone to try it
on!!!
Sounds like a great way to put self employed buyers into homes. All I need to do is locate the good people with mattress money, and find the right home to structure the deal around.
Thanks Gino
Sounds good, can’t wait to find someone to try it
on!!!
Thats why this type of transaction might not be right for you. You really should know the note business pretty well before you do this type of deal.
Learning how to structure a note properly so all persons involved have their butt covered is very important. People that look at this type of deal and are scared of it for an unjust reason are robbing themselves. This is CREI. Do what feels right for you.