Posted by ED Garcia on December 26, 2000 at 09:56:31:
Amy,
You’ve told us about your tenant’s credit, but you haven’t told us about yours. There are some mortgages companies around that will only require 6 months seasoning on a valued borrower.
You could sell the note, but would have to do so at a discount. I think it would kill you to know that you have already leased optioned the property for $33,900, when it’s worth $50,000 and then have to discount it from there.
There are many ways you can use the equity in you property. You can borrow against it, and you could pledge it for additional security with a local lender when doing your next deal. Amy, I feel that if you’re going to be an on going investor, you’re going to need a lender that you can work with and depend on. My suggestion is for you to visit with your local bank. If you have credit problems then, find a local hard money lender in your area. A good local mortgage broker should be able to help you find a hard money lender.
I’m a newbie, and on my first deal I recently purchased a rehab 5 bedroom, vinyl sided colonial from Fannie Mae for $8000. After rehabing it I have a total investment of about $18,000 and a lein on that property for that amount. It recently appraised at $50,000. I have someone in it with a 1 year lease option- $33,900 15 years at 11%. She has a bankruptcy in her past and is rebuilding her credit. She is paying me $550 per month. She is anxious to own the property and wants to talk closing costs with me asap. Other than a land contract, what are me options to hold the note? Ideally I would like her to buy it outright so I can take the money and buy more rental property, but even though she has paid me on time for 4 months, it’s not realistic at this time due to the short time frame. Does anyone have any ideas for me that would allow be to get a reasonable profit out of this one in a short period of time??