Looking for help in Mississippi - Posted by Alfred
Posted by Alfred on July 29, 2003 at 13:22:59:
I have found a very motivated seller with a duplex for sale. The duplex is 1400 square feet and is ready to rent in its current condition. There are no repairs necessary, and all of the appliances are included. The property is not under contract, but can be with a moments notice. It is not on the market yet, but he said that if we weren’t able to come to an agreement he will be offering it with a real estate broker. The specifics are as follows:
- the property appraises for $85,000
- the asking price is $75,000
- the down payment is $7,500
- the term of the loan is for 12 years at 5.0% APR owner financed
- I would estimate a yearly gross income on the property of $11,000
- my monthly note would be right at $570
- the location of the property is considered prime commercial property in downtown Gulfport.
As you can see this is a great deal. Ahh the catch.
I don’t have $7,500 right now. All of my money is allocated into the purchase of two other properties that I expect to close on within 60 days.
My proposal to you is for you to hold a 2nd mortgage on the property.
- the interest rate I had in mind is around 13-15%.
- the term of the loan should be amortized where the payments are approximately $100-150 per month
- there could be a balloon payment any time after 30 months.
- if the loan were to run its course without a balloon payment it should be paid off in less than 7 years.
I do understand your concern with holding a second mortgage, but hopefully the equity in the property, and the the way both the first and second mortgages will be structured will be appealing. Of course since I am not holding any of the cards in our negotiation I will be flexible. You let me know what changes I could make to make this situation more appealing to you. If you are anyone you know would be willing to help please e-mail me at firstname.lastname@example.org. Thank you.