Posted by mike on March 25, 1999 at 22:42:49:
aint no reason to pay off a good pvt mtg. see if you can move it to another property somewhere, yours or a partner. try moving him to junior position to a new first. might mean you have a better chance getting a lower ltv from the new money source. ask ask ask
Such a sweet deal-I had to brag to my RE buds - Posted by Matt B
Posted by Matt B on March 25, 1999 at 19:33:30:
I have been going full speed since the convention getting my real estate biz going. As many of you know, I quit my job in January to pursue this full time. I have learned TONS since then, but deals have been just very slow coming.
After the convention, I was supposed to close on 3 deals. It turned out, using my new education gathered at the convention, that my real estate agent was a huge weasel. He had lied about the real value of the properties that I was looking at. Instead of going into the whole story, I’ll just say that I had put $1,500 in earnest money into these deals, then decided to back out after discovering I had been lied to. 2 sellers chose to keep the $500 put up by me, and 1 decided that I could have it back. The education that I gained was worth far more than the $1,000 that I lost, though.
I have ALWAYS maintained a positive attitude. I know what a lot of you know… this RE thing really works. I kept on marketing away, advertising that “I buy houses”, sending letters to sellers, running ads, etc. I now have a few REAL deals in the works. Let me brag about the sweetest one, though.
I had purchased Ron LeGrand’s full 3 course offering at the convention. Believe me, it was worth more than its weight in gold! Along with the courses came 90 days of phone support. I really didn’t think that I would ever have use for it. I even told my fiance that I wished that they would have given us a credit off the purchase price for it, since I really didn’t see that it was needed. Well, my first call made it VERY worthwhile.
I got a call on my “we buy houses, take over payments, no equity, no problem, etc…” ad the other day. A man who lived in a duplex wanted me to buy it so that he could rent it long term from me. (I really don’t want any rentals just yet.) The story was that his sister in law who lives out of state owns the place. She owes $9,700 on the half that he is living in. He has just been making her mortgage payments as rent. He also bought out the man who had lived on the other side since he didn’t want anyone living beside him. The man who he bought it from financed him on the $9,500 that he paid. He currently owes $4,000. (That makes total owed on the property $13,700 for those of you without calculators.) The occupant told me that he grew up in the house, and now just wants to stay there.
The man who called me said that he just had an appraisal done last week which came to $46,000. He said that his sister in law told him that she didn’t want any money out of the deal, she just wanted the place out of her name. He had tried to get financed at banks (which is why he got it appraised) and was turned down because of a past bankruptcy. His wife is the only one working also, since he was injured on the job and could not return to work. (It’s amazing what you learn when you shut up and listen.) She works full time as a nurse, and is the one paying the bills now.
Since this deal didn’t fit exactly into the mold of what the courses had just taught me, (owner financing, wholesale/retail, lease option) I told him that the numbers looked good, and I would let him know what I could do after I took a look at the place. I didn’t know what to do with the place! I knew the numbers were good, but it didn’t fit the molds. So I called the LeGrand hotline tonight. The guy at the other end of the phone set me straight in about 2 minutes!
He suggested that I go get a hard money loan for 50% LTV. Knowing my credit history, I couldn’t argue with the fact that I would have to pay higher interest. With a $23,000 loan, I could cash out the 2 mortgages of $13,700, and walk away with about $8,000 cash at the closing after closing costs. On top of this, I would get $23,000 worth of equity at no additional charge! After seasoning the loan for a year, I could then refinance through a less expensive source and continue to pull money out if I chose. I could then chose to keep renting to the occupant, or let him lease option the house.
Now I do have some homework to do here. I will start tomorrow confirming all the numbers that this occupant has given me. I am calling the sister in law and the private mortgage holder. I’m ordering a title search as well. The occupant has told me that he will give me a copy of the fresh appraisal when I stop by tomorrow. I may be celebrating a bit early, but I couldn’t help but be happy.
Anyone know if this real estate stuff works? I’ve heard you can’t do that crazy stuff here where I live.
Re: Such a sweet deal-I had to brag to my RE buds - Posted by SCook85
Posted by SCook85 on March 25, 1999 at 21:22:35:
Matt,
Go get em! Sounds like a good deal. Best of luck with it.
SCook85
Re: Such a sweet deal-I had to brag to my RE buds - Posted by Jackie in Dallas
Posted by Jackie in Dallas on March 25, 1999 at 21:21:21:
CONGRATULATIONS!!!
Sounds like you’ve found a winner - I hope it works out!
There is one other opportunity for additional profit…
the private mortgage holder may be willing to take a discount if you offer him cash. You probably don’t want to let him know you are buying the place just yet though!! He wouldn’t have much of a reason to discount if he knew he would be getting full price within a few weeks anyway.
Good Luck - it’s your turn for a good one!
Jackie
Re: Jackie, email me - Posted by Millie I.
Posted by Millie I. on March 26, 1999 at 02:59:35:
Jackie,
Emailed you 3 times, twice to old email address, no reply. Once to new email address, had error message.
I introduced Duncan of Dallas to you. He needs info to join Dallas RE club. He must have given up when your email address didn’t work.
Millie I.