Posted by Charles Parrish on May 18, 2006 at 23:56:37:
Why get involved in houses without a profit potential or equity?
I suggest you use your energy in find a better deal. Why take on the seller’s problem.
The owner took his equity out of the houses by refinancing.
Make the following offer to the seller:
You will buy both of his houses if he gives you 20% of the loan amount at the time of settlement.
This will automaticlly increase your equity, and could give you some sweet cash.
Use some of that cash to learn how to manage tenants.
Good luck.
Charles Parrish
Possibe deal; Need Advice - Posted by Sheaj
Posted by Sheaj on May 18, 2006 at 14:15:23:
I have a possible deal and I would like feedback. There is a seller with a few houses. The houses do not have much equity; recent refi. The majority of them are already rented out. Vacant ones need minimal work - landscape, clean up. My questions are the following: 1. Would he be able to sign over deed if he took out some of the equity, would that be considered a lien on the house? 2. Are either sub2 and owner finan the better options? 3. What would be pros and cons of deal? Thanks for advice.
Shea
Re: Possibe deal; Need Advice - Posted by Chris in FL
Posted by Chris in FL on May 19, 2006 at 15:23:49:
Shea,
How much is a little equity? How much money is “minimal work”? Will these properties cashflow positively after taxes, insurance, vacancy, repairs, etc.? In place of equity, will owner give you favorable terms (finance at below market rate, etc.)? There are a lot of pieces to the puzzle to determine whether the deal makes sense or not, but be clear that you should be getting a bargain in some way (in other words, don’t buy it just because you can; buy it if it makes cents).
Many people prefer sub2 because loans stay in his name (don’t affect your credit). All else being the same, I personally would opt for owner finance because I think it is more cut and dried (if the deal makes sense at all). If you do it either way, make his payments yourself or insert some control that ensures you his payments are being made. Best wishes!