Ideas for structuring my deal? - Posted by Mike (IN)

Posted by Clair-MO on October 25, 2003 at 11:57:38:

Doug, If the owner is having problems with being foreclosed upon by the courts. It is possible the sellers won’t have enough credit to refinance an ant hill less their home but Mike, if I understood does have good credit could refinance not having to use the hard money lender. But I wouldn’t give the owners 20k to move on but something along in the amount to $2500 to $5000 to move on as long as sign the deed over to the buyer, that is Mike.

Ideas for structuring my deal? - Posted by Mike (IN)

Posted by Mike (IN) on October 25, 2003 at 08:33:45:

No Repairs needed/great condition
Value $92k
Existing Mortgage; $28k / $400 month incl taxes & ins.
Seller needs $50k of equity so will sell for $78k
Needs $20k of equity now but will hold out for rest
on short term note or balloon payment within 1-2yrs
Seller will allow Subject To on existing $28k Mortgage

Tools Availible;
I have a private money lender that will loan the $20k
but only on a short-term note of 6-12 months at 12% interest only payments.

I also have excellent credit if I needed to just get financing with seller holding a 2nd.

I can either sell on lease/option or cash out for a retail sale. If I lease/option, tenant/buyer rents would easily be $950/mo.

My Thoughts;
Use private money lender for $20k to give to seller now and set up with $0 or minimal payments with balance of $40k due within 1-2 years and take the 1st mortgage over subject to.
$20k at 12% int only payments - $200/mo
$28k Mortgage - $400/mo

Problems for lease/option would be the short term note from the private money lender of 6-12 mos. Problems for getting financing would be that the selling price is higher than I would normally pay without getting terms.

What would you do?


Re: Ideas for structuring my deal? - Posted by Clair-MO

Posted by Clair-MO on October 25, 2003 at 10:43:45:

Mike, If you need to use the private money to give the money to the owner but why, does the owner need 20k? If you take it by subject to the existing mortgage have the seller sign the deed over to you and put the home in a LLC for your own protection with you as the beneficiary for the property. Is the property going into foreclosure? IF it is going to foreclosure court you might ask the owner the question how much money will the Judge give you to move on? How much is the selling price? You said that “you are giving 40k to the private money lender…Why?” If you are paying him/her 12% interest only payments for 6 to 12 months…Am I missing something? I don’t understand the reason behind of giving the private money lender an extra 20k plus 12%, Am I reading what you wrote wrong?

Re: Ideas for structuring my deal? - Posted by Doug K

Posted by Doug K on October 25, 2003 at 11:39:53:

The simplest solution is as follows:

The seller already willing to subject to, so have him RE-FINANCE the property to get out his 20k, or better yet, refi up to the agred purchase price and he OUT of the picture.

No need to use a hard money guy on this deal. If he won’t refi, I personally would pass on the deal.