Posted by Susie on February 09, 2002 at 17:21:59:
Shane, I would certainly like to hear more about your plan since this gives some hope to those just starting that need to get their financial house in order before making a killing in real-estate! It seems that the $25K you paid off in the past year would be nearly your net income for that year. Please do share! Thanks! Susie
Need an expert to assit with my problem - Posted by Sekalfwons
Posted by Sekalfwons on January 21, 2002 at 11:58:09:
I have a hard luck situation that I am trying to get out of and was hoping there was some one out there who could help me find a solution to my problem.
Here goes, I have a ridiculous amount of debt, I have no money, my credit is shaking mostly because I’m maxed out in debt. I have found the man of my dreams and he wants to marry me. He has some blemishes on his credit report, but he doesn’t have the outlandish debt problem I have. He currently has no mortgage, pays no rent, and owns his car. We will need a 4BR home to accomodate the needs of our blended family. He currently resides in his family’s home and I live in a 2Br condo. I have a motgage and the payoff is around $29K. My property is worth about $39K. Our combined income is $85k.
Is this feasible? I found a home that might meet most of our criteria. I am in the process of getting more detailed information about it. It’s a fixer upper listed at $137K that’s listed with a broker. Is it possible to purchase a rather large home knowing that my income to debt ratio would not qualify me for a big enough mortgage to buy a larger home even with my boyfriend’s income? Is it possible to structure a deal where the home is listed under market value, rehab, and then refinance for full market value so I can payoff the crazy debt I have?
If you have any ideas other than the one I mentioned please let me know? Thanks in advance…
Sekalfwons
Re: Need an expert to assit with my problem - Posted by Ronald * Starr(in No CA)
Posted by Ronald * Starr(in No CA) on January 23, 2002 at 20:01:08:
Sekalfwons--------------
The only way you will find out what you can do is to try. Talk to some local real estate brokers and real estate mortgage brokers and ask them what they think.
Now, for people in your situation, usually it is better to not go through real estate brokers and institutional lenders to buy a home. It is usually better to work what some people call “creative financing.” Mostly this means having the sellers loan you part or all of the purchase price. Or taking over the existing loan on a property rather than paying it off.
There is a cost to you of this. You must learn some techniques and approaches. You will have to search out potential sellers. You will have to negotiate a deal and then carry through to make the property yours. You will probably not have a real estate agent to help you. But, there is a savings of maybe $8K or so which does not have to go to the real estate broker’s commission. It might take you a few months of work to learn about real estate and another few months to actually purchase the property.
If you really want to get married and start living together before you can buy a property, you may have to find a suitable house to rent. This could be ok, since the price of renting might not be more than the cost of ownership. You might find a house that you can do a “lease/option” whereby you rent for a while and then obtain ownership a little later on.
Once you own a home, you may be able to rent out your condo for enough to cover all your costs, including maintenance, hoa fees, and a vacancy factor. This will not make you rich soon, but held for many years, it can be a good investment. You could sell it, if you want. If you have lived in it for 2 of the last 5 years, you can sell with no federal capital gains taxes on any profit you take in. However, there is very little equity in the property and selling it through a real estate broker will eat up a good deal of it.
Meanwhile, start tightening up on your budget. The “crazy debt” you have did not come floating down from heaven. You spent more than you had in cash. If you want to get a house, YOU will have to do what it takes to get one. None of us are going to do it for you. All we can offer is encouragement and a little guidance to avoid pitfalls. “IF it is to be, It is up to M E !”
Good House-Hunting**Ron Starr
Re: Need an expert to assit with my problem - Posted by c stamos
Posted by c stamos on January 23, 2002 at 01:29:17:
I don’t know for sure if it is feasable, but here are a couple of suggestions that I would check into:
First, is the property bank owned? If so, go to the courthouse and pull the file on the property. Find out what the defaulted amount was. I know that for bank owned properties around here, Brokers are instructed by the bank to list it for fair market value instead of just trying to get what they are owed. Being a Realtor, I have made offers on bank owned properties for about the amount they were owed ( a little less actually)and the bank took it.
If it is not bank owned, find out how long it’s been on the market. If it’s been sitting there for a while (as a fixer-upper) they might be receptive to lower offers. Since it’s listed with a broker, I would try finding a Realtor that will represent you. Usually this does not cost you any money since they will get paid on the sale of that house. Remember the broker who has that house listed represents the seller as a client. You would be only a customer. Therefore it is beneficial for you to be represented on the buyer side of the sale. Your agent will have all the data on the home that you need.
Another suggestion regarding your debt is talking to some experienced mortgage loan officers. They might be able to structure a deal or find a program that can work for you. Mortgages have become a highly competative business, so there are a lot of programs out there and people who can put deals together. If you get a realtor, they should be able to refer you to a couple of people.
Also, the man of your dreams may be able to qualify on his own for the mortgage. Based on 5 percent down at seven percent interest, your Principal and interest payment would be about $865.00 (plus taxes and insurance and possble PMI).
Consult w/ some professionals who might be able to structure a good plan for you.
Best of luck!!! 
Re: Need an expert to assit with my problem - Posted by JohnBoy
Posted by JohnBoy on January 21, 2002 at 18:11:07:
Out of the $85k combined income, how much of that is his income?
He has no mortgage, pays no rent and his car is paid for. Does he have any other debts like credit cards, personal loans, etc.?
Other than your mortgage on your condo, how much debt do you owe to pay everything else off?
Re: Need an expert to assit with my problem - Posted by Shane
Posted by Shane on January 21, 2002 at 15:26:41:
I have a couple questions…
Do you absolutely need a 4 bdrm? What area of the country do you live?..it seems that your house value is quite low compared to what the broker is trying to get for the one you mentioned…You should look for something cheaper than $137K, especially if you’re going to need to fix things!! Is your boyfriend handy with the tools? You won’t be able to afford to hire things done with your debt load and the cost of the new house.
Don’t be discouraged though! Many people have debt, the difference is are you doing things to get out or things that make it worse?
As for debt…my wife and I had over $160K! House, CC’s, cars, student loans…it seems to be the same for many people in America! I learned some things and in the past year, we’ve paid off $25K and our plan will have us debt free in 40 months…and our combined income is only $60k! It can be done if you have a plan so keep asking questions and keep looking for the answers…if you care to email me at home, feel free as I probably won’t get back with this posting soon.
In Health,
Shane
Re: Need an expert to assit with my problem - Posted by Tony
Posted by Tony on January 21, 2002 at 12:31:37:
Sounds like you situation may require more than just the expertise of this site.