Posted by Sean on May 10, 1999 at 14:46:03:
What is the average interest rate on the credit card debt?
John Behle what would you do??? (long) - Posted by Rick Grimsley
Posted by Rick Grimsley on May 09, 1999 at 10:54:29:
My Rehab is almost finished and ready to sell. I did
alot of things wrong (i.e. doing the work myself ect.)
but have had alot of fun for my first creative real estate
project!! This is an owner occupied property. I got the
property as a Cal Vet repo on a land contract from Cal
Vet. Loan bal. is 51,500. Property value retail 85,000.
The loan has 6 months seasoning. Interest rate of %7.45
My credit is good.
My debt is high at 23,000 unsecured. My plan was to sell
retail using a realtor, pay off my debt and move on to
my next deal. The market is strong in California so
selling should not be a problem. But what about doing
a wrap or creating a 2nd?? I don’t think I can do a
wrap unless I refi due to the land contract with Cal Vet?
I just got your video course and see many ideas for profit
by creating notes…What would you do with this one
considering my financial position???
Cash is King - Posted by John Behle
Posted by John Behle on May 10, 1999 at 13:56:11:
I think given the circumstances, cash is king. If you can sell easily for cash, do so and pay off the debt. Credit card debt is a killer - get rid of it.
Building cash flow is the ultimate object. Part of that is getting rid of negative cash flows. To me everything boils down to a bottom line yield figure. I would weight the return on the cash left in the property vs. the return on paying off the debt. Without more details than you have given, it sounds like you can get cash out and keep it rolling.
Re: John Behle what would you do??? (long) - Posted by David Alexander
Posted by David Alexander on May 09, 1999 at 17:07:31:
I’m not sure I follow you, you bought for 51,500, and you have another 23k in the deal, and you currently live in it? If you just took over a 51,500 loan, even contract for deed, I would say sell with the CFD in place. Getting money at 7.45% is hard to come by, unless you continue living in it. But, it also depends on your plan. Are you after cash, cash flow, etc. If you got cash would you have a place to reinvest to continue growing it or would you just spend it?
Also one last point creating a wrap is a second.
Does Cal Vet have a loan underneath? If so this would be a third.
David Alexander
Re: John Behle what would you do??? (long) - Posted by Rick Grimsley
Posted by Rick Grimsley on May 09, 1999 at 21:46:38:
The 23k is credit card debt not related to the home.
The loan on the property is a Cal Vet loan in my name.
The plan was to sell and pay off all debt, buy again
well below market. If I do a wrap I would not be able
to pay off the credit card debt right away…just
wanted to get some ideas. I don’t think I can do a
wrap with the 1st loan being a land contract in my
name can I?? Any profit from this deal would be
invested in the next home. But after debt is retired
not much will be left.
Re: John Behle what would you do??? (long) - Posted by David Alexander
Posted by David Alexander on May 10, 1999 at 14:51:55:
Yep, There’s your answer, cash it out put the credit cards and cash to work on more deals. On the otherhand for FYI you can wrap a CFD as long as you state it in your new contract what your doing. ther is no way however to avoid the DOS clause, becasue you don’t have title.
I have one property I took over with a CFD on it. I really want to sell it(color me motivated)because it is both a rental property and I don’t have a deed.
David Alexander