Is there a deal here? (Ed Garcia please respond.) - Posted by B. Huffin - TX

Posted by Alchemy on March 22, 2000 at 10:17:34:

“…Please share your view on this deal. After all,
that’s what this forum is all about.”

Yeah, and I partnered with the Easter Bunny on my last deal with funding from Ms. Tooth Fairy at Brooklyn Bridge Capital. Didn’t you see the tombstone advertisement? They were pretty proud of that deal. Usually I use Lanny the Leprechaun at Pot O’ Gold Mortgage but he couldn’t meet my terms and BBC stole the deal. But I digress…

I don’t mean to be evasive, elusive, or uncooperative. What I would prefer to do in this instance is assist Mr. Ruffin in getting his deal done if he is so inclined. When the escrows close he can preach it from the mountain top if he so desires. Maybe he can even write it up and post is as a success story on this site so we can debunk the ‘there is no equity in the market’ excuse once and for all. Sometimes you have to create your equity or your profit, and it doesn’t necessarily come from discounting the second. (though it never hurts to ask) :slight_smile:

Is there a deal here? (Ed Garcia please respond.) - Posted by B. Huffin - TX

Posted by B. Huffin - TX on March 21, 2000 at 19:04:09:

I’m a newbie investor. A lady called on my ad today wanting to sell her house. The particulars are:

2202sq foot house 4 bedrooms 2 baths Ellis co TX area.
value - approx $125K
1st mortgage - 103K
2nd mortgage - 20K
total monthly piti - $1430

House is pretty good shape (5 years old).

I was thinking about a L/O but the high mortgage scares me. They want to sell at 123K and are motivated.

Any ideas? Would be 1st deal.

Re: Is there a deal here? (Ed Garcia please respond.) - Posted by Bill Gatten

Posted by Bill Gatten on March 25, 2000 at 17:35:16:

Not an advertisement (gawferbid)…but I’ve done a dozen just like this and made a lot of money. And my gosh I hate to see you take some of the advice proffered here and walk away from an excellent opportunity. This is like a miner throwing a diamond away because theirs no gold in it. One should not only THINK outside the box: he should GET th h? outside of it and stay that way! Think of the landlords who complain about negative ( or no) cash flow, never realizing that they could easily sell the tenant all or part of the tax write-off, the equity build-up, the appreciation, the water rights, etc…in the property if they just knew how and wanted to.

OK, on your deal…consider this:

Put the property into a title-holding land trust (yawn), become a beneficiary with the owner (she keeps 10% of the beneficiary interest, which she forfeits to you at termination (4-5 years later). Her holding the 10% saves you from a load of worries (…DOS, insurance issues, owner issues, dispossession, property tax, reassessment, etc.). With the proper documentation, you now have 100% of the benefits of ownership (including the tax write off and the ability to sell it to someone else, assuming they live in and own a part of the same property).

Next you put someone else in as a 3rd co-beneficiary who handles all (your) closing costs and monthly payments, as well as all mtce, repairs, etc. for the term of the trust. You agree that you will give them the property, the tax write-off and, say, half of any future appreciation in exchange for their doing it your way. Now you have acquired the property with no cash out and no costs and no credit or credit risk of bank loan. (Yawn again).

However, before you did any of this, you should have approached the seller about her paying off that second TD first. She says she can’t. You say, “Then when can you?” She says “In 4 or 5 years at best.” You say “Great! We’ll just leave it on then, so long as you make the payments on it.” She says, “I can’t make all those payments.” You say, “How much CAN you afford to pay?” She says “Half.” You say “OK then.”

Now your have a positive cash-flow on top of the equity you created by raising the price to your 3rd party by $4-5,000.

No URL’s; no trademark names…just think about it. Please? (sigh).

Bill Gatten

PACTrust . . . - Posted by Brad Crouch

Posted by Brad Crouch on March 24, 2000 at 20:41:06:


Everyone seems so entrenched in the few ways to make money in Real Estate, that nobody wants to take seriously the benefits of a PACTrust.

This looks like a perfect candidate.

Check out for more details. It’s simpler than it appears at first glance. Don’t let the “nay-sayers” scare you away!


IF there is profit to be made here it depends on… - Posted by Jim IL

Posted by Jim IL on March 22, 2000 at 10:35:12:

The seller.

Dear B Huffin TX,
I can only see one way in which this deal can make you some money, and not have you feeding it.
That would be to have the seller pay the second mortgages payments.
That is IF the payments on the first loan are in line with market rents, or lower.
So, you can do this in my opinion one of two ways.
You take the home “Subject to” and create a note (yes unsecured, and that is scary) for the seller to pay you monthly the amount if the second notes payments.
Then you sell it to someone on a L/O with non refundable option money upfront, and hopefully some cash flow. The price to your buyer should be higher than current market value anyway, since they are buying it later. (hopefully not, and you can do it again a few times.)

You can do a L/O with the seller and have your payments be only enough to cover the first note.
Then sell the same way as above.

I am sure that some will tell you this is crazy, but the bottom line is, every deal has risk involved. The only question is are you willing to take that risk to possibly make some money here?

and, if the seller will not go for this, then NEXT!!
Move on, and call them back in a few weeks time. Maybe they will have changed there minds?

Of course this is all assuming that the $1430/month is WAY out of line with market rents now for this home.

So, money can be made here, you just need to be careful and proceed with caution.

Just my $.02,
Jim IL

Contrary to popular belief… - Posted by Alchemy

Posted by Alchemy on March 22, 2000 at 08:48:28:

there could well be a deal here. Not surprisingly it is an opportunity that has been missed by four sharp guys that posted before telling you to keep looking. That should tell you what kind of competition there is for these deals. This is not intended as a slight or a poor reflection on the esteemed gentlemen that were very correct in their assesment using the conventional wisdom. Sometimes it takes thinking outside the box. I tried to e-mail you, but the address you posted bounced. If you would like to explore further please post a valid e-mail address.

Re: Is there a deal here? (Ed Garcia please respond.) - Posted by Ed Garcia

Posted by Ed Garcia on March 22, 2000 at 24:29:11:

B. Huffin:

There use to be a commercial that asked, Where’s the beef ?

I’m afraid everybody’s right when they say, that there is no profit in this deal.

I think you’re attraction to this deal, is terms. The seller is willing to sign it over
to you for the balance. So you’re seeing a no money down situation.

The one thing I teach is that when buying a property, to have a game plan.
If you had some one to flip it to, and could talk the 2nd into discounting their
loan $10,000. Then you might have something to think about.

As for now, NEXT CASE.

Ed Garcia

Re: Is there a deal here? (Ed Garcia please respond.) - Posted by BILL (0H)

Posted by BILL (0H) on March 21, 2000 at 21:34:22:

Market value $125,000----purchase price $123,000, and approx. $3,000 in closing costs. No profit there. When the seller moves out do you have someone to immedietly move in? If not, you’re looking at a loss the first month.

This is a deal I’d sure pass on. There are so many distressed/REO properties that can be picked up for pennies on the dollar, so why get hurt trying to get juice out of a lemon? Tell them, thanks, but they need to call a Realtor that can sell the property for full market value.

Re: Is there a deal here? (Ed Garcia please respond.) - Posted by Ed Copp (OH)

Posted by Ed Copp (OH) on March 21, 2000 at 21:09:46:

Ed Garcia, might be in the bathroom or something. So let me make a comment or two just to get us thinking until he gets back.
We are talking about almost 1/8 of a million dollars in real debt here. I’ll bet the seller is more motivated than you will ever know.
Monthly payment over $1,400. How much down payment were you thinking of asking for someone to have the privilege of servicing this debt?
It looks to me like you would have a difficult time generating a profit with this deal. (my opinion). Would a couple of months vacancy just eat up your profits?
You say the seller is motivated, and I am sure that they are, If it were me I might consider this transaction if the seller were motivated enough to give me say $15,000 cash at the closing table to take this deal off thier hands… Ask them if you care to, I would if it were me. If the answer was no I would look around for a more promising situation…ED

Re: Is there a deal here? (Ed Garcia please respond.) - Posted by Charles

Posted by Charles on March 21, 2000 at 19:17:09:

Maybe I don’t understand what you want to do. FMV is $125K and you are going to buy it for $123K? Where is the profit? Will you be getting much more than $1430/month?

Re: Contrary to popular belief… - Posted by Bassman

Posted by Bassman on March 22, 2000 at 16:17:04:

Sort of like your valid email @
Very respectable easter bunny

Re: Contrary to popular belief… - Posted by Bobby - TX

Posted by Bobby - TX on March 22, 2000 at 11:24:47:

My email address is

Re: Contrary to popular belief… - Posted by Ed Garcia

Posted by Ed Garcia on March 22, 2000 at 09:13:37:


I’m always looking to do deals outside the box. Please share your view on this deal. After all,
that’s what this forum is all about.

Ed Garcia