Posted by Dewey (NJ) on March 20, 2000 at 08:00:33:
Thanks for the information. It seems to be a very good way to finance your properties. I am trying to make arrangements to be in St. Louis and hopefully will be there to meet you and others.
Dewey
New Angle - Posted by Laure
Posted by Laure on March 18, 2000 at 07:13:00:
I am thinking about running an ad: “Accepting applications for Contract for Deed. Several properties available.”
I am thinking, weed them out, run them through the mortgage company and find the ones who will fly right now. Buy and sell the house, bing, bang, boom. Have a current list of qualified buyers. I do the legwork with the lender, and the buyer doesn’t know he can go straight to the bank without me, so I won’t lose them to a realtor and the MLS.
Thoughts?
Laure 
Re: New Angle - Posted by Phillip
Posted by Phillip on March 19, 2000 at 02:30:22:
When you run this AD will be for houses you acquire to sell on a lease option, or contract basis?
Re: New Angle - Posted by chris
Posted by chris on March 18, 2000 at 15:16:53:
Hi Laure-
If “Lease Option” confuses prospects and you have to use “Rent To Own” for an ad to make sense to these folks, do you think “Contract For Deed” will be any clearer to these folks?
K.I.S.S.
-Chris ;-}
Re: New Angle - Posted by Mark-NC
Posted by Mark-NC on March 18, 2000 at 10:09:24:
Laure,
I have been doing something similar to this for sometime now. Except my ad will read, Owner financed homes all areas, easy qualify,Some credit required XXX_XXXX. You will get tons of calls but probably only 1 out of 5 is going to fly.I used to run the ad without the “some credit required” but you get to many junk calls.
When they call I basicly tell them that we are investors and we buy and sell homes in all prices and areas and they sell as fast as we get them because we make it so easy to put a buyer in a home. I will ask them what area they are looking for a home. Once they tell me I will say that I don’t have anything in that area right now but I can get you one if you are trully interested.
Then I will ask them the pertenent Questions I need to know like what is your credit like, how much money do you have to put down, and how much could you afford for a monthly payment? I will also of course ask what type of home they need. If they sound like they may be a likley buyer I will ask them, if they are interested and I will tell them I can probably get them in a home how soon do you need one?
Then I will qualify them and depending on their situation they are either going to be a Note deal a lease option or a mortgage.
Thats the condensed version of it but it has worked for me.
Mark
Re: New Angle - Posted by JohnBoy
Posted by JohnBoy on March 18, 2000 at 09:09:54:
How about this:
Own your own home!
Seller will carry financing.
Anyone can qualify. Call xxx-xxxx
Notice the key word in the ad? “Can” qualify.
It doesn’t say “will”, “are”, “your approved”. It says you CAN Qualify.
Wouldn’t you qualify pretty much anyone depending on how much cash they can put down regardless of credit? If a buyer has the worst credit but can come up with 20%-30% down would you finance them? That’s where they “can” qualify if they “can” put enough cash down. You’ll gladly carry the balance. If a buyer has lousy credit and not enough cash to put down then they won’t qualify. If they cry that your ad says everyone can qualify, you say that is true. Even they “can” qualify “IF” they “can” put enough cash down.
The ad gets their attention to where anyone reading it thinks your going to finance them regardless of credit. You are providing they “can” meet your requirements by either helping them get financed or by them putting enough cash down, right?
Even Ed Garcia says you can pretty much finance the dead at 65% LTV or lower. So with 35% or more down you can probably find them financing or be willing to carry them yourself with that much down.
Now you can weed out all the buyers that “can” qualify!
Happy investing!
Re: New Angle - Posted by Sally
Posted by Sally on March 18, 2000 at 08:50:03:
Do you think that people reading the ad will know that you are talking about a house for sale? In my area they wouldn’t have a clue. Also, the phrase ‘accepting applications’ may turn off people. Most people don’t want the hassle of paperwork or putting in an application and they could just pass your ad by. Perhaps something that grabs them “Homes Available at discount” or something that connotates that you will make it easy and cheap for them to buy a house. Just my thoughts
Re: New Angle - Posted by Laure
Posted by Laure on March 19, 2000 at 07:30:39:
That’s just it! Get the buyer approved through a mortgage company or finance company or through selling a note BEFORE I acquire the property. Have the end buyer approve the house I purchase. Then it’s all a NO WAIT deal !
Laure
Re: New Angle - Posted by Laure
Posted by Laure on March 18, 2000 at 18:17:44:
Actually, they understand Contract for Deed, and want me to tell them how Lease Option is different. Contracts have been pretty standard here for many years.
Laure
Re: New Angle - Posted by Laure
Posted by Laure on March 18, 2000 at 10:39:23:
So, you go find a house. How do you handle the new buyer viewing the house while it is still lised for sale? If it is MLS, the purchase price is public knowledge. Just negotiate a price with the seller? Are you then able to mark it up if the buyer knows your purchase price? How do you avoid these problems? I am assuming you don’t actually purchase the property until your buyer has agreed to buy, which I would assume would include a showing.
Thanks !
Laure
Re: New Angle - Posted by Laure
Posted by Laure on March 19, 2000 at 07:45:13:
I like that. But I just may have to start using a computer answering machine ! LOL
Laure
Re: New Angle - Posted by Laure
Posted by Laure on March 19, 2000 at 07:48:55:
You’re right, afterall, there are many buyers out there that are afraid of the whole process and just THINK they can’t get a loan. You have a good thought about the “apply” thing. Get rid of it.
Laure 
Re: New Angle - Posted by Sheik
Posted by Sheik on March 20, 2000 at 11:43:24:
What about title seasoning issues. Conventional lenders
may want to see some title seasoning on your
part.
Sheik
Re: New Angle - Posted by Mark-NC
Posted by Mark-NC on March 18, 2000 at 12:00:52:
Laure,
In my intial conversation I tell my prospective buyer, depending on their situation I can litterally buy allmost any home on the market and put them in it with ease. And that is true If they have enough down and decent credit.(But most of them don’t)
As far as the price of the home goes yes they know what the asking price is. But what I do is look for homes that have some motivation from the sellers whether it be through MLS or FSBO. Then I will make an offer and usually the home is listed on the low side anyway so a little higher apprasial is not a problem. That is how I create the room needed to make the deal.
As far as the buyers concern I am not going to tell them what I negotiaited the price down to. If they are persistant about it I just say I got it down just far enough to make the deal work.
One of the things I find out about people that want to buy a home is the people that respond to the owner finance type of ad are either intimadated by institutional lenders or brokers or they just don’t think they can get a home other than owner financing. So it has been my experiance right from the start if you take these people and tell them “yes I can get you in a home” they will follow you to the end of the world if you can, It’s the american dream to own a home. I have had people cry and hug me at closings telling me they never thought they would ever be able to get a home.
When people call and you ask them how much money they have to work with most of them will have very little. So as far as marking the home up I tell them that I have costs involved in this transaction that have to be covered and unless they can come up with the extra cash to cover them I will have to rasie the price to cover them. For things such as closing costs or discount points I may have to pay if I am selling the financing. I bet I pay closing costs on 95% of my deals. So I just say do you have the cash for closing or discount points? They usually say no. So I say they have to come from somewhere so the only way I can pay them is include them in the price. That allways satisfies them. If they ask me whats in it for me I just say yes I am in investor I help solve peoples problems buyers and sellers and in return I make a small profit from each deal. If I didn’t I wouldn’t be in business and they accept that.
If after They have seen the property and they like it. Now comes the time to put the contracts together I get up front money from my buyer with a contract and it states the home I an going to make an offer on. It is an upfront contract that spells out the deal. I usually get at least $1000. earnest money. I tell them I need this much because I have to know they are serious about this. I will be putting my name on a contract to buy a home and resell it to them and I don’t want to end up buying the home for myself. They understand this. It is also stated that if my offer is not accepted they get their deposit back. If the offer is accepted I go into full blown offer to purchase contracts with my buyers get my apprasial and take it to closing.
Most of the deals I do are Note deals because of the simplicity and the issue with seasoned title on the mortgage side.
If you are interested in seeing some of the forms I use let me know I can e mail them.
Also as an FYI This seems to work best with properties and buyers with homes under the $100,000 range. And the average of around $65,000.
Mark
financing? - Posted by Laure
Posted by Laure on March 19, 2000 at 07:44:07:
so, financing is exactly my question. I can get a quick loan from my banker at minimal costs. But what kind of loan do you get for your buyer? Creating and Selling notes can be expensive to the bottom line. My idea is to run them through the mortgage broker and ONLY work with those that qualify, or someone like Benneficial Finance… or screw that ! Ed Garcia ! LOL
My original plan was to reduce my debt load, not add to it. With the L/O’s I’ve been doing (the lazy way by my taking a mortgage for the property) my debt load has increased. Counterproductive to my goals.
With the 10% discounts that the Note buyers want for bad credit, do you just add it to the buyers’ purchase price? And then, does that make their payments out of the affordability range?
This can be really great. Taking homes that are NOT selling, and getting buyers that THINK they can’t buy, and we get to “sandwich” our profit in between. We really are PROBLEM SOLVERS!
Laure
Re: New Angle - Posted by Doug Jones
Posted by Doug Jones on March 18, 2000 at 20:02:16:
Mark,
I am trying to put deals together just like you are talking about. The one I am working now is a $97,000
home, which I have offered $72,000 cash/mortgage.
If I can ask you, how would go about buying this?
I have talked with a few note buyers and with 5% down, the offers I am getting are going to cost me between $7000 to $10000 with 10 1/2% to 11% interest depending on the term.
BTW, my credit is 650 to 700 FICO.
Give me some ideas
Re: financing? - Posted by Mark-NC
Posted by Mark-NC on March 19, 2000 at 08:35:44:
Obviously you have a different system in place and created a niche for yourself.
What I was suggesting was mostly designed for flips. Yes, you do get a discount on the sale of the Note. But if any one is paying up to 10% on the discount they need to look elswhere or learn how to structure the note for a better buy rate.
Obviously It would be best to go to a good mortgage broker but the fact is the subprime market is really cracking down on flips and or unseasoned title. That is why it makes it favorable to use the note side at this time. And the fact that My note buyers are full NO DOC makes it real easy to put someone in the home and the people that need this is the ones I target. The paper work is easy and they close fast.
There is a misconception in the note business as far as it’s ability to Put lousy credit buyers in a home. It can be done but everybody is affraid of them and it’s just not worth the hassel.
I very rarley work with anyone under 600 score. And as far as the discount, many times I can get my buyer to pay it or I will take it out in the form of a second mortgage, Even if it is over the appraised value. It all depends on the buyers situation. Sure the rates are a little higher to the buyer but that is not hard to get around I tell them I will help them refi in a year and the extra money they are putting in as far as payments are concerned it comes back to them in tax deductions anyway so its not a hard sell.
My goals are defined different. I Like to flip propeties make the Quick easy cash and collect as many small second mortgages I can. This creates a cash flow for me and I do it without using any of my money or credit and I have no debt load.
Mark
Re: New Angle - Posted by Laure
Posted by Laure on March 19, 2000 at 07:53:17:
What about the business lender at your bank? I don’t go through regular mortgage division anymore. I go straight to the business Loan Officer. My notes are written as “commercial notes” with the property as collateral, just as in a traditional loan. Give it a try. These guys are used to business proposals and that is the problem with regular home loan people. They think in the box, and it’s harder for them to understand all our investing. You show a business banker your deal, and with your FICO, I am sure it will fly. OR talk to Ed Garcia, here on the board.
Good Luck
Laure
Re: financing? - Posted by Nate Tyler
Posted by Nate Tyler on March 19, 2000 at 18:26:12:
Hi Mark-
Who are you selling your notes to?
Nate
Re: New Angle - Posted by Dewey (NJ)
Posted by Dewey (NJ) on March 19, 2000 at 09:01:45:
Laure I am curious in your bank loans. What kind of interest rate are you getting for your “commercial notes”? Are they no docs?
Thanks