How to L/O BIG Expensive Home? - Posted by Earl

Posted by Jim IL on November 10, 2000 at 15:01:46:

Earl,
I saw your post here the other day but did not have time to answer you then.
I was hoping someone else would at least give you some feedback, but since they have not, here goes.
I did just what you are talking about.
I live in an upper end home (FMV approx. $190-$195k) now that I have on a L/O.
I knew going in that I could not get a loan myself to buy this place now, but could afford the home monthly.
I am in this home for the "Mortgage balance at time of close plus $10k."
Which means I am in here for approximately $145k, leaving me plenty of equity to sell later if I choose.
I also only pay the mortgage payments, which are quite a bit lower than market rents for the area.
I found this home with some help from bandit signs.
Basically, I get responses on my bandit signs wherever they are placed.
So, if you want to buy a home in a certain area, target that area with signs.
I just met with someone this morning who has a $500k home for sale, and they called from one of my signs.
I am not buying this home “Yet”, but since the seller just got a job transfer, I have a feeling I will hear from him in a month or so if it does not sell. (He leaves the state on December 1st.)
No matter the price range, there will be motivated sellers in all areas.
Even wealthy people get divorced, job transfer and/or fall on hard times.
And we are here to help because we are "Problem solvers."
I plan on staying in this home for another year or so, and then either L/O’ing out to a new T/B’er or selling it retail. And if for some reason it does not sell, I only have an option so I could walk away from it free and clear if need be.
I have it tied up for six years, so there is no rush.
All I had to do with this home was clean it up a bit, since it sat vacant for 6 months.
(with a Dog inside, so it was MESSY!)
But, it is also only 4 years old, so it was in good shape.

I can honestly say that any home I live in in the future I will buy creatively, because there is just no point in getting a loan myself. Why risk my credit or cash when I don’t have to?

I can also tell you that there seem to be many of these types of homes available these days due to all the new developements and easy qualifying home loan programs.
So if you really push your marketing you can find one.

Good luck to you,
Jim IL

How to L/O BIG Expensive Home? - Posted by Earl

Posted by Earl on November 07, 2000 at 17:03:48:

I read Bill Bronchick’s your article about buying a big expensive home $200K+ on a lease option, because it makes more sense economically. The neighborhood that would be me and my wife’s 1st choice is pretty expensive. I think the avg. price of a home in the area is about $250K and they are building new homes from about $(300 - 600)K. I could not afford to pay $300K for home, but I could make lease payments of $2K/mo., although I am only paying about $932/mo. now on my current mortgage. My home is small and will not suit my family’s needs in the near future.

Has anyone used this technique, outlined in Bill’s article to buy a big expensive home for your own personal use? I would like to get some recommendations on how to find some potential l/o homes in the $200K+ range, in the hot seller’s market. I have already started sending out letters to FSBO and FRBO in the paper. Any other recommendations, would be appreciated.

Thanks,

Earl