Posted by Ken L (MI) on August 10, 2007 at 06:12:19:
- I’ll have to ask her what she can do on the money side of it.
- She owes this money to a local bank.
- The loan doesn’t make sense to me because it’s already for more money than I would pay.
Posted by Ken L (MI) on August 10, 2007 at 06:12:19:
Sale option on a filthy home - Posted by Ken L (MI)
Posted by Ken L (MI) on August 09, 2007 at 07:22:14:
I am working on doing my 4th Lonnie Deal. We have one in the hopper that we take possession of on Aug 28th. The lady is moving out of state and allowing us to paint the home and porch while she is still there. This was our third deal and we finally bought right at 3000.
So this leaves us with about $2000 in the bank.
There is another (abandoned) house in this park that has is owned by a younger girl (25ish) that has moved back home with her mom. She is into the place for about $4000
The home would need to be purchased for about $1500-$2000 because it needs a thorough cleaning and we sold a very similar one for $6k with $500 down and payments of $225 per month back in January.
Anyway a couple of things here. I was doing some research on Options (I’ve never done one). I was thinking of trying to option the place for about $1500-$2000 sale price, maybe we’d give her $50 for the option. Now, this will leave her upside down for about $2000. I was thinking of taking a vehicle or something else as collateral on this amount.
Now, the place needs a lot of cleanup but not much in the way of repairs. Do we go in there and do the cleanup to try and get a buyer? Or do I look to simply do the option, let one of my buyers worry about the cleanup and try to move forward. There is probably a good 6-8 hours worth of cleaup and trash removal involved. Do I just go in there and do this work?
I guess the question is this as well. If I have an option to buy at $2000 and she finds a cash buyer willing to take over her loan, how does this work for me?
How about Momma? - Posted by Dr B. (OH)
Posted by Dr B. (OH) on August 10, 2007 at 15:12:02:
She won’t be able to get her $$ out of it as is. Can you go down to the bank with her and see if they’ll short it to you for 2K.
If you sandwich L/O this, you can go with her and have her notarize a letter at the bank stating the title comes to you when all payments are made. The bank would staple the letter to the title. You take over payments, pay someone $50-60 bucks to clean this dump and you can sell it for your $6k.
Personally, I think the deal is too skinny without her bringing $$ to the table. Is her mother on the hook as a cosigner for either the home or lot rent? Momma might pony up to make it go away.
Re: Sale option on a filthy home - Posted by Mr. H (IN)
Posted by Mr. H (IN) on August 09, 2007 at 19:22:35:
Is she actively marketing the home? If so, she may have some interested buyers who need a contract sale. This may set you up for a “Lonnie’s first deal” scenario.
Offer her 500 less and sell to the buyer for 500 more. If the seller really needs out of it, offer 1000 down and 100/month until she has 3500.
Re: Sale option on a filthy home - Posted by Ruben (KCKS)
Posted by Ruben (KCKS) on August 09, 2007 at 09:30:40:
I have read about options but have never used one. I think the issue you will have with using an option on a mobile home that is considered personal property is recording the option. In my state of KS we use DMV titles so unless there is a lien recorded on the title it can be transfered. So other than taking her to court I do not see a way you could enforce the option as you could with real estate. In real estate you could record the option and that would place a cloud on the title so that she would have to deal with you to release the option.
It sounds to me like you have a deal that does not work unless the seller can come up with 2K of her own money. Here are some questions I would have for you:
Does she have money to bring to the table to get you a clear title if you buy it from her at $1,500 to $2,000.
Who is she into the home for at $4,000 and can you negotiate a short sale from them?
If the loan makes sense can you just assume it and then sell it on a lease option?
Here is something I have done in the past with some success. Figure out what you want to have in the home if it was pre-sold. If that is $2,000 then tell the borrower you will purchase the home for her full asking price of $4,000 if you find someone willing to buy it for the fair market value with a down payment of $2,000. Then market the home. This works best if you can get a key and show the home and if the home is vacant. Then if you find someone who has the down payment do the deal. On the two deals I did this way it was a verbal agreement. Yes I take the risk of them selling it by themselves but if they do great I enhance my reputation of trying to be a problem solver but on both deals I purchased the home. The first one they came down to my price so I bought it. The second one I found a buyer and did the deal as I described above.
I would not clean out the home I would have her do it. After all it is her problem and she needs the solution. I hope this helps you out. Good luck investing.
Ruben D. Flores
Re: Sale option on a filthy home - Posted by KenL (MI)
Posted by KenL (MI) on August 09, 2007 at 20:11:04:
She’s not actively marketing the house. She’s a motivated seller whose main problem is that she owes $4k on a home that isn’t fetching that price (because it’s dirty and she’s lazy).
I doubt she has people lined up. What I want to do is jump in and make some money off of this and I am wondering what is the best way to do this. She can’t sell it to me on payments because that will not satisfy the current bank lien on the home.