Posted by doug, ky on February 02, 2000 at 10:25:52:
Contact the owner of the second, and inform him that you might be coming into some money ($65,000 or whatever)and tell him your thinking about investing that money. Your timing is perfect because you can invest that money so he has his $70,000 at due date or he can just take the $65,000 now. If he says yes, tell him you’ll have your attorney draw up the papers and send it to him. Of course, you will be in escrow already with your new buyer.
I need some help with a property that I have in escrow that I am selling.
I purchased a fixer 6 plex back in November using hard money for a first in the amount of $23,500. the seller took back a second for 70,000, on a straight note balance due with no payments and no interest in 6 months. the seller is very old and wanted out so he took this deal. My hard money guy had the seller sign a note stating that he understood that he would be responsible for the first in the event I default and that I had none of my own money invested in the deal. He signed it with a little reservation, but he did.
My buyer is putting down 25K and has great credit and wants a new loan, and my broker will get him approved, but since I set this deal up to close fast, I would like to get the holder of the second to take a discount on the second, since the proceeds of the new loan will pay him off in full, and I see potential to make some extra $ by getting him cash earlier than planned. If I can get him to take less, I stand to make quite a bit more on the deal.
How do I approach this to make it happen? what does he need to sign and when, in order to have this work out as I would like it to? How much does he need to know?
Otherwise, my hard money guy does not want to get paid off. He said that for $850, he will let a new buyer assume the first. If my first deal falls through for some reason, can I sell the property with a cash down payment, and let the new buyer assume the first and the second, and how does the new buyer work out the terms of the balloon second, if they can’t come up with the 70K and want to renegotiate the terms, and what liability would I have if any in all of this? Suggestions please!