Posted by Ed Copp (OH) on March 08, 2000 at 07:52:20:
Hello ED,
Generally speaking the note that you talk about in your post, is assumable unless it contains language that does not permit assumption. So you can probably assume the note even if the heirs don’t like it.
This deal sounds like it could be quite profitable for you so, get it done. You probably would benefit by retaining an attorney to represent your interests in this case, if you can find a lawyer who does this kind of work.
One more thought of mine is that after you close this deal (with payments going to the heirs), you might want to try to buy the heirs out individually. Perhaps offer shorter term paper and some cash in exchange for the present positions on the note. Good luck, get help if needed and get it done…ED
Hi my name is Ed,
A couple weeks ago while doing some work an my mobile home(rental). I found out that the lady that owns the park (4.2acres and has 33 spaces with 26 of them in use)is tired of holding on to it. She is 72y/o and her husband died living her in charge of this property. Well, she lives an hour from this area and decided to hire a broker/property manager to take care of the property for her. He has been doing this for the last 6 months and has fixed some of the things that affected the “bussines” for example he has fixed water leaks which have taken the water bill from 1700.00 average to 1300.00 (confirmed by statements) by fixing leaks and enforcing no car washing policy. The lady told to him that she was thinkig about selling the property a couple months ago but they did not list it for sale(broker does prop. mgmt.only. but charges her 6% if she sells) and in a conversation with him I asked if he thought that the owner might be interested on selling. To which he answered that she had talked about it before but she hadn’t mentioned it any more.
To make the story short she had a:
15 year 42,500 note at 7.5%
27,900 left on it.
Lady (owner)signed my offer to assume( giving her 1,000.00)and paying brokers fees, but individual holding note(heirs actually)do not want mortgage to be assumed(tryed talking to them). But also, no D.O.S. seems to be present on paperwork.
Appraisal by tax district 43,000.oo but comps run around 60,000.00. Land alone worth 45,000.00
Talked to a banker and after doing the paperwork he says his willing to finance 70% of the loan amount. Very nice!!! He gets a 1st mortgage on a property @ 33% of F.M.V. and I get the privilege of paying 10% interest for 5 yrs.
The numbers:
Monthly Income:
26 lots @110.00 a month = 2,860 (145.00 average area rent without water)
Monthly Expenses:
Water =- 1,300 (possibilty of submeter)
30% mgmt and maintnance =- 858
taxes =- 90
loan = 384
Total = 2632
Also thinking about buying original note instead. Anyway there are so many things going through my mind right now…
Please, any guidance will be greatly appreciated. Feel free express yourself if needed.(slam) Also sorry about all my mistakes (still practicing on my english).
Re: MHP Ideas, sugestions, please??? - Posted by DougO(NM)
Posted by DougO(NM) on March 08, 2000 at 08:14:23:
I agree with Ed below, this is a chance to get some “cool” stuff done here. Unless the mortgage or note prohibits assumption, GO FOR IT! It sounds to me that you are getting into this deal by giving the seller $1K, paying the broker a commission and assuming the note ? (I’m in a hurry, gotta go teach a class about credit at the High School) I’d take that thing on NOW, and start working (in a subtle manner) on those heirs. DO NOT PAY THE NOTE OFF IN CASH BY GETTING A NEW LOAN, you’ll ruin your chance for a discount.(Remember, heirs most likley want to get their hands on that CASH, NOW) Drop a note with each payment offering to pre-pay in advance for say a 15% discount. This can be the entire amount, 12 months at a time , 6 , 3 months, it doesn’t matter. Then as Ed says below, you might be able to buy out individual heirs. The rest seems OK, granting I didn’t take a lot of time to anaylize. Buena Suerte and keep us posted!