Posted by lyal on March 17, 2000 at 14:06:50:
NT
Is there any play here?? - Posted by lyal
Posted by lyal on March 17, 2000 at 09:44:30:
Got a call on my “I Buy Houses” as last night. Dan has a 2BR single BA with a single car garage and finished basement that he bought on CD 2 years ago for 69K with 7500 down (didn’t get rest of the terms on the CD). The CD has a balloon coming due May 1rst but because of a divorce etc he won’t be able to get a loan to buy out the balloon. Seller will NOT extend or renegotiate. Naturally he’d like to sell and not lose his 7500 plus any other equity he’s built up. I told him it “wasn’t possible to salvage all of that…”.
Haven’t done any homework but from the description and part of town, it sounds like one of the old (50+ yrs) “cookie cutter” 1 and a half story homes that proliferate there. Painted up nice it would sell for about 80 to 85K now (blazing market in the last 2 years).
He mentioned me buying the place and re-selling to him on another CD. Not too hot on that idea.
Without just coming out and buying out his CD balance for cash (don’t have that kind of cash right now), is there any play here?
Idea’s please??
Thanks, Lyal
Re: Is there any play here?? - Posted by Ben in Ohio
Posted by Ben in Ohio on March 18, 2000 at 07:26:36:
If I am the holder of the CD, I may want to negotiate–it may be to my advantage. Are you in a position to buy the house? If so, buy it for the amount of the CD. Lease/Option it back to the owner for an agreed upon price, say a year or two down the road. If he fails to make rent payments you evict and LO or sell to somenoe else. In the meantime he lives there and you solve his problem.
Maybe… - Posted by Carmen_FL
Posted by Carmen_FL on March 17, 2000 at 15:37:21:
I’m not an expert, but you could contract to buy from him at something under $65K, sell owner-financed at $80K, create a note for 90% ($72K), get a minimun of 5% down from someone with half-decent credit, sell the note for $68,400, cash out the seller for $61,500 (if I’m reading this right), pay Dan whatever you agree of the leftover $6,900 + down payment ($4,000), hold the other 5% as a note (best if they come up with 10%! Then you get $8,000 cash, but more likely to get 5%), solve Dan’s problem, and get a few bucks to boot. You could get an option on the property, and run an OWNER FINANCING ad, you should be able to get someone qualified and closed before May 1. Dan may not be too keen to lose some of his equity, but if his other choice is losing it to foreclosure … well, the lesser of two evils. If you can sell it for more (and it appraises), so much the better.
Just one possibility, since the note holder seems inflexible and cash is needed.