structure - Posted by shawn hobson

Posted by evelyn on February 05, 2001 at 16:07:14:

thanks for clarifing. He has a seminar close to me in Ft. Lauderdale in a few weeks. I think I will be attending that seminar/workshop.

evelyn

structure - Posted by shawn hobson

Posted by shawn hobson on February 04, 2001 at 02:29:40:

Can anyone give me advise on how to structure a deal involving two seperate residential townhomes, both individual selling at a discount but wanting to cash out, not willing to carry back any paper. I was hoping to control the property a sell at retail through a broker.

Re: structure - Posted by Bill Gatten

Posted by Bill Gatten on February 04, 2001 at 15:06:08:

Shawn,

You might want to take a look at my advice to Greg above (http://www.creonline.com/wwwboard/messages/9766.html)

Bill Gatten

One of several ways - Posted by Monique

Posted by Monique on February 04, 2001 at 07:05:26:

Shawn,

Here is just one of several ways to structure this …

Consider buying the properties all cash, contingent upon you finding a buyer first – known by the folks around here as getting an option agreement. Say the FMV on the townhouse is $150,000 and that you’re seller is willing to let it go for $115,000 all cash.

  • Get it under contract at $115k all cash, contingent upon your finding a buyer in the next 60 days.
  • Then, sell the property YOURSELF for $150K (or more), not through an agent.
  • Run an ad that says “Seller will Finance, Shaky Credit OK” and then some words about the property.
  • Assuming the property is in a desirable neighborhood and reasonably priced, you’ll get tons of folks calling you who could not otherwise get a loan.
  • Screen them for how much down they have and what their credit looks like.
  • If they have 5% to put down (more is always better), then take them down to YOUR mortgage broker and find out if they can get a 75% LTV 1st mortgage. (Not a 95% LTV loan which would require better credit than a 75% LTV loan.)
  • You are going to take back a 2nd mortgage for the difference of $30,000 (or $150,000 - $7,500 - $112,500)
  • Get your Buyer under contract (unless you’ve done so already) and do a simultaneous closing.
  • At closing, your Buyer brings their $7,500 (plus half the closing costs).
  • Along with their 1st mortgage, you net $120,000 cash ($7,500 + $112,500) which you immediately use $115,000 to pay off your Seller, who pays the other half of closing costs.
  • These are done in two separate closing meetings, both on the same day.

At the end of both closings, you have bought and sold the property, you have $5,000 in your pocket and a 2nd mortgage (CASH FLOW) for $30,000.

Monique

GREAT POST, Monique! (nt) - Posted by Anne-ND

Posted by Anne-ND on February 05, 2001 at 16:31:42:

Yow ZAA!!

Re: One of several ways - Posted by Joe

Posted by Joe on February 05, 2001 at 07:03:38:

This way works great, I have done it for 5 years. The problem is now, it is almost impossible to get a mortgage on a flip. Where do you arrange for a mtg. loan for your buyer? Thanks for the help.

Re: One of several ways - Posted by evelyn

Posted by evelyn on February 04, 2001 at 20:58:19:

WOW…who’s course did you take to learn that!!!
Please let me know. That was a good answer.

evelyn

Re: One of several ways - Posted by Monique

Posted by Monique on February 05, 2001 at 10:04:22:

Joe,

We have some “enlightened” mortgage brokers that we work with locally in GA. The seem to always have lenders in their back pocket that can overcome the tough issues.

Monique

Re: One of several ways - Posted by Monique

Posted by Monique on February 05, 2001 at 12:15:46:

Let me restate that.

We learned about Options from Ron LeGrand. His “Cash Flow by Controlling Real Estate” course covers Lease/Options and Options well.

The part about targeting challenged credit buyers and using low LTV loans to buy at your option strike price, we stumbled upon just trying to work the deals. If it’s in there, just call me a bad student because I didn’t get it when he covered it.

Monique

Re: One of several ways - Posted by Monique

Posted by Monique on February 05, 2001 at 10:05:58:

Evelyn,

We have tons of courses, but didn’t get that one from any of them. Just came out of trying to get the deals to work.

Monique