Mortgage payment swap - Posted by Danny20

Posted by jason on April 13, 2006 at 16:11:50:


Mortgage payment swap - Posted by Danny20

Posted by Danny20 on April 12, 2006 at 23:08:15:

I own 2 poultry houses on 6.5acrs. I owe about $149k on them.
A housing contractor that builds nice homes near me is very interested in owning my houses and retire from house building. He has proposed swapping debt with me with some homes he has built(will discuss how many) against my poultry farm price. I told him I would take 279K for my farm. The homes he is offering are selling for 80k. He rents these houses out for 400.00/mo. Houses are approx. 4-5 yrs old. I don’t know how to value his homes against my farm in order for me to come out?My wife and I would like to retire from farming and get into something else.How many homes should I ask for in order to make this deal work for me? I figure he has about 40-50K in each house. I need advice! Thanks

Re: Mortgage payment swap - Posted by Danny20

Posted by Danny20 on April 13, 2006 at 21:53:55:

Thanks for the replies Ed and all! I am going to sit down with the contractor this weekend and gather all the info I can and what his intentions are. He and his wife are just going crazy with the thought of owning these poultry houses.(Hope they’re ready for this!) He stated to me that he was tired of building and wanted to settle down to working his own farm and not for someone else all the time. I just want to make sure that I can get a fair shake out of this , hoping that with maybe 5-6 of his homes that I could continue to rent them out or sell them and clear what I owe on the poultry houses.He will recieve a monthly income from the houses of approx. $6K/MO. He will get his income almost guaranteed each month as long as there are birds in his houses. My side, I can get rent of 400.00/mo per house but is 5-6 houses going to do the trick for me??
You stated you needed more info and I hope to get it this weekend.If you need specific info, please advise me as I am new to investing, but willing to learn and apply. Thanks so much!

Re: Mortgage payment swap - Posted by Ed Garcia

Posted by Ed Garcia on April 13, 2006 at 10:24:28:


At this time we don?t have enough information nor do you. You?ve stated you?re not sure how many houses he wants to trade or you want to take on trade.

Which ever way it goes it can be simple arithmetic. You could easily take 3 of his 80K house possible 4 with no sweat. There are so many ways that this deal can be structured but we would need to know more about each of your circumstances.

At this point, it appears his motivation is to unload some of his houses and yours is to retire from farming and get into something else.

If you both choose to purchase each others property with new financing on all properties involved that could easily be done as well with no money down. Each of you has equity position in your properties that can be used as consideration.

Again, you don?t give us details to know if the existing financing of each of your properties is worth keeping or it would be better to get new financing. Because he?s a building contractor, he may have short term financing with a small bank that could be coming due and may be of no use to you.

Ed Garcia

Re: Mortgage payment swap - Posted by James Harris

Posted by James Harris on April 13, 2006 at 05:54:39:

Danny, Here’s a suggestion. I would consider enough property to offset possible downpayment needs perhaps about 20-30% of your sales price; at full fair market value, NO DISCOUNTS on sales price. Take the 80k and have the buyer come to the closing table with 200k.