Posted by John Behle on May 04, 1999 at 13:19:06:
Perhaps we were posting about the same time. I’d jump on that deal and end up buying it below 80%, with nothing down, cash in my pocket, cash to the seller and an extra $10,000 every year in gravy through improving the notes.
Testing All Creative Thinkers - Posted by Robert
Posted by Robert on May 03, 1999 at 22:20:16:
Ok…here’s your chance to prove your knowledge as a creative real estate investor. I have recently found two properties FSBO (Seller owns both properties). The properties are completely debt free. The first is a 2 - 2, with a fenced back yard, a 1 car garage and a pool, built in 1959. It’s in pretty good shape, just cosmetics need to be done. Their asking price is 96,000 (which we think is a bit high. The tax assessors office shows the market value at $74,000). They will give me owner financing with 10% down, 7 %, for 30 years.
The second home they own is a 4 - 2, with a 2 car garage, about 1800 sf heated space, again just cosmetics need to be done. They already have built another house and are moving this week. Their asking price is around $130,000 (which is really high compared to comp sales for the area and to other properties that we have come across. The tax assessors office values the property at a market value of $85,700). Home was built in 1959. We are not intending to flip these properties.
How can we buy these properties no money down and still give them some money at closing? We have money available in a retirement account, but we would rather not use it for downpayment. I have a few ideas on this, but I would like to hear some of your creative thoughts as well.
Thanks and I hope this gets real interesting.
Robert
Re: Testing All Creative Thinkers - Posted by Robert
Posted by Robert on May 04, 1999 at 22:28:49:
Ok, well, they will probably take $80,000 for thier 4 -2 and 65k for their 2-2 with pool. Thats pretty good deals as the 2-2 pool home is in a neighborhood where the homes cost over 150,000 to buy, and the 4-2 home is in an area where the homes cost 100,000. So how can I give them cash at close, acquire the property no money down?
Re: Testing All Creative Thinkers - Posted by PBoone
Posted by PBoone on May 04, 1999 at 12:25:49:
Robert,
You do not go into how much money you want to give them @ closing. They want 10% dn but how much do they really need or really want? answer that and we can go to the next step.
Pat
Re: Testing All Creative Thinkers - Posted by Robert
Posted by Robert on May 04, 1999 at 11:33:20:
They are flexible on the asking price…and once they are shown the market value and the comps for their area, we feel they would be willing to come down on their price. They really don’t want the properties as they are elderly and have already built their new home. Again, my question is…(which no one has posted an answer to) how can we give them say 80% of the market value for no money down and they walk away from closing with cash in their pockets. These are good deals as these home are in good condition, the sellers are flexible, and the homes are completely debt free. Just give me a technique or two where they can walk away from closing with cash, yet we acquire the property no money down. Don’t analyize whether the deal is “good” or not, just some ideas on again…how they can walk away from closing with cash in their hands and we have the property no money down.
Re: Testing All Creative Thinkers - Posted by David (TN)
Posted by David (TN) on May 04, 1999 at 10:49:56:
Without being as rude as the last poster, I have to agree that these “deals” are not “deals”. Just because a home is for sale by owner and they are willing to do terms, doesn’t mean you should go for it. You need to find a home that is selling for a good price plus all of the above.
I say pass on these and keep looking.
Good luck,
David
Re: Testing All Creative Thinkers - Posted by Robert
Posted by Robert on May 06, 1999 at 11:21:12:
Well, I don’t want to give them any of my own money, hence no money down, I can put up to as much as 50,000 dollars down if I needed to as long as I get the money back within 3 months, which would then make the deal no money down. For both properties I would like to give them at closing between 10 and 20 thousand dollars. I have the money like I said in a retirement account which I can take out short term without penalty and without incurring taxes as long as I put the money back in to the retirement account within 3 months. Hope this helps