Sell for terms - Posted by fish

Posted by JohnBoy on April 06, 2002 at 11:00:54:

From what I’ve heard section 8 allows you to buy on a L/O where they will still pay the rent. So you might look into that.

But if your main goal is to just get cashed out then I would try to sell it out right first.

Run an ad saying “Possible Seller Financing”.

Then have your potential buyers fill out a 1003 credit app. Take that to your mortgage broker and have him/her pull their credit and see where they stand as far as being able to get financing.

There are lots of 100% programs out there where buyers can get 100% financing with FICO Scores as low as 580. There may even be some that go a little lower than that.

If they don’t qualify for 100%, then see if they could get 95% or 90% or whatever. Then if you had to carry back the difference as a small second to help them qualify. Then you get cashed out with most of your money, if not all of it, and move on.

There is a lot of loose money out there right now and most people with low scores can qualify for some type of financing. Hook up with a good mortgage broker that deals with a lot of credit challenged borrowers. They will have lots of sources to get these type of borrowers financing.

Sell for terms - Posted by fish

Posted by fish on April 05, 2002 at 21:12:10:

What would you consider good terms to sell a rehab’d house in a run down area.The homes next to this finished rehab are distressed.Most buyers that would be interested in living in this section of the city are poor.How would you qualify these people and sell a fairly nice house to someone quickly and at the top of mkt value.The appraisal was at 67k and the purchase price at 44k and 8k to rehb.Rents would be at 850-950. Any advise on how to strcture a quick sale would be appriciated.Or your thoughts on keeping the property and renting sec 8. I would’nt want the tenants to destroy this newly done home before I can sell it.Just your thoughts to help me determine how I should proceed. THANKS !! OH one more thing this is a row home if that matters.

Re: Sell for terms - Posted by JohnBoy

Posted by JohnBoy on April 06, 2002 at 01:56:44:

If the rents are that high for a $67k property, then I would sell on a L/O getting $3k - $5k down and leasing at $950 - $1100 per month setting the option price at about $74,900 and go with a 2 year term.

Re: Sell for terms - Posted by Question!

Posted by Question! on April 06, 2002 at 03:13:43:

Running your figures, I see that you would be raising the purchase price about 17% over FMV for terms and charging 12% or so for interest. So, you recommend going for this much just because the figures appear to allow for it?

Re: Sell for terms - Posted by JohnBoy

Posted by JohnBoy on April 06, 2002 at 04:34:36:

That wouldn’t be 17% over FMV. That would be just under 12% above FMV and I wouldn’t be charging any interest at all. I would just be renting the property at a premium rent above market rents for the area.

If I was to get $5k down and charge 12% interest then the P&I payment would only be $719.00 per month.

That is why I would go with a L/O on this because the market rents on this far exceed what you could buy it for on payments.

Re: Sell for terms - Posted by fishhead

Posted by fishhead on April 06, 2002 at 10:33:18:

Rents in this area are high, but the only tenants who have consider this house are sec8’s.All the 3 br homes in the area rent for 850 and up, mostly paid by the local housing authority, they pay 80%, the tenant pays the other 20%.My question is how do I find qualified T/B for this type of area.The loan I have on the property is conventional,Would that make a difference to you if you were selling this on a L/O.Should I just rent it at the mkt rent or try to sell it. I really need cash for another deal and would like to cash out of this one.I,ve learned alot since acquiring thishouse and want to move forward in my investments and want to build up my cash reserves for sub 2 andother deals. Your thoughts appreciated Thanks!