Posted by Joe Kaiser on April 10, 1999 at 01:19:55:
Interest on 10k @ 15% is $1,500 a year, or like $125 a month. He can afford $450 and you think borrowing the dough to do this deal is too expensive at 15%?
It ain’t.
“Sell” it to him on a lease option so you can charge $450 “rent” and he can live next to mom like he hopes.
How to handle this unique call? - Posted by Debby in Houston
Posted by Debby in Houston on April 09, 1999 at 21:23:37:
Got a call from a fellow who asked me if I would be willing to buy the house next door to his mom (a fixer-upper FSBO) then sell it to him so he can be next door to his mom, cuz his credit’s not great and he doesn’t have the $13000 cash asking price! Says he can afford pymts of $450. Told him I would look at it and call him back. It needs about $6K of work if I retailed it on the normal market, but he says I don’t have to do anything, he’d buy it as is and fix it up himself. I think after repaired value is about $35K but having a hard time finding comps. Thinking of offering to buy for $10K cash and selling as is to the guy for $20K, with a 7 yr. contract for deed with pymts of $386 +$50 escrow ea month (that’s 15% int). Is this usurius, unethical, outrageous, normal? I doubt that the one window unit a/c even works! Leary of tying up my 10K but can’t use private funds w/15% rate for this. Comments, suggestions?
Re: How to handle this unique call? - Posted by Alex Gurevich, TX
Posted by Alex Gurevich, TX on April 12, 1999 at 08:57:23:
I would not consider buying a place just because I have somebody who wants it. The deal has to have the merit on its own. The “would be” buyer can afford and is willing to pay that much for living next to his mom. But if he drops out, would all other buyers in the area do the same ? Until you know it’s a “yes”, don’t do it.
Re: How to handle this unique call? - Posted by Irwin
Posted by Irwin on April 10, 1999 at 09:41:54:
I would be a little concerned with “having trouble finding comps”. Isn’t anyone buying homes on that street? If it is strictly a rental area, and your buyer fizzles out on you, are you willing to own it as a rental for the rest of your life? The economics seems pretty good if you’re not buying in a war zone. Check the guy’s credit, employment history and go with Joe’s l/o suggestion, suggest, 2 years max. You can always extend it.