The million dollar napkin deal - HELP!! - Posted by Michael Murray

import · May 30, 1999, 7:35pm

Posted by Michael Murray on May 30, 1999 at 23:36:20:

I didn’t know about portfolio loans. I will try that, thanks. My credit is not totally FUBAR, but just not great. Also, the contract is now on a proper RE form, so it is good and solid.
Thanks,
Michael Murray

import · May 30, 1999, 7:35pm

Posted by Michael Murray on May 30, 1999 at 19:35:44:

The other day I got wind of the deal of the decade and dashed over there to try to tie it up. Now I am panicked. Here’s how it went.

I heard of a private showing, going down in about two hours, for Realtors only, of a huge 8000 sf house to be sacrificed at $1,000,000 in a critically urgent situation. This house is brand new, never been lived in, and was built as a corporate retreat by a company who is now desperate to unload it because they ran into business problems just as the house was being completed. According to the Realtor, the house should appraise for about 1.5 million dollars. I asked if I could come to the private showing as his guest. He allowed that I could if I kept out of his way as he wheeled and dealed with the other Realtors. I arrived at the house before anyone else and walked right in since there were still workmen there. I had enough time to thoroughly explore the immense, cavernous structure. Each time I thought I had seen it all, I discovered another set of rooms, apartments, swimming pool with swim-up wet bar, video center, children’s theater, caretaker’s quarters, etc. It was so new, there were still wet paint signs around. I greeted the listing Realtor, who, having just arrived, was setting up open house signs. I asked if he had brought a sales contract with him, he said no that this was just a private showing to Realtors. I pressed him into creating an offer/contract on some pieces of paper which we found. He did have an old contract with him, all filled out for some other deal, so we used that as a model and wrote the danged thing up right there. I gave him a $50,000 earnest money check and walked away just as the other Realtors were arriving. The offer was accepted before the day was over and I now have that gorgeous house under contract for $600k.

Now what do I do??? Does anyone on this board know who will make a quick 65% (maybe lower) LTV loan for $650,000 on equity only, without appraisal or credit check? With the holiday eating up part of my time, I only have a few days left to commit or the deal is off. If you would like to offer suggestions or email me privately, I will certainly appreciate it.
Thanks,
Michael Murray

import · May 31, 1999, 8:35pm

Hard money lender - Posted by Ben

Posted by Ben on May 31, 1999 at 20:35:28:

Regatta Capital is a hard money lender in Denver. One
of the how-to articles by Frank Stuart talks about them. I do not know how to get in touch with them, try doing a search under Regatta or hard money lenders.

import · May 31, 1999, 1:05pm

Questions - Posted by GINO

Posted by GINO on May 31, 1999 at 13:05:24:

Michael,

This deal is very interesting to me if it is truly in Aspen. Is It?

If not no problem this can still be done pretty quickly. Does the property have an appraisal? How unfinished is it? How much time do you have? What is the adress so I can have someone look at it. Please include the county it is in.

And last but not least…if You could flip it in the next week and make a 75-150k profit in your pocket would you?

GINO

import · May 31, 1999, 11:13am

Re: The million dollar napkin deal - HELP!! - Posted by Sandy FL

Posted by Sandy FL on May 31, 1999 at 11:13:22:

Michael… didn’t we have conversation about “Paper Power” ? The LeGrand tape they sent out in late March?

I am astounded at your deal. Straight out of the textbook. Me, I can’t write a 50K check, (well I could, but it would bounce REAL high…) so I guess I would have done the option thing. Who are you going to market this Aspen monstrosity to? And did you record anything to reference your agreement? With that much money on the table, I might wanna cloud the title a little? I dunnno, this is way outta my league. I guess,… personally… I would put an emergency call into one of the PLAYERS (ie partner), like John Behle or LeGrands office or … someone like that.

sandy

import · May 30, 1999, 10:28pm

Re: The million dollar napkin deal - HELP!! - Posted by Sue (NC)

Posted by Sue (NC) on May 30, 1999 at 22:28:41:

Try going to a few local banks, ones that are large enough to have commercial lending departments. They will tend to make portfolio loans, ones that they won’t resell- so they won’t go thru the same underwriting that Fannie Mae loans require. My bank does not require appraisals, but they did want a credit check. You might find one that will look at the equity without considering your credit.

One word of caution- make sure that you get your deal off of the napkin, signed, & ironclad before you discuss it with too many people. It’s amazing the number of people (friends, even) who will try to steal your deal when large sums of money are involved…

import · May 31, 1999, 2:25pm

Re: Questions - Answers - Posted by Michael Murray

Posted by Michael Murray on May 31, 1999 at 14:25:52:

Hi Gino,
The deal is near aspen, in Glenwood Springs actually, Garfield County, Colorado. Glenwood Springs is near several world-class ski areas and is the home of the world’s largest natural hot springs pool which draws tourists from all over the world. I think this house would have corporations crawling over the top of each other to have it as a company retreat.
No appraisal has been done yet. It is virtually complete except for gunniting of the 70 ft. long pool, and some minor landscaping. I have until June 9 to refuse or commit. Would I take $150k if I could flip it fast? As Ron LeGrand would say “Uhmmm, let me think…OK.” As for the address, I will email you privately for that.
Thanks,
Michael Murray

import · May 31, 1999, 12:34pm

Thanks Sandy - Posted by Michael Murray

Posted by Michael Murray on May 31, 1999 at 12:34:00:

Yes we did talk about such a fantasy deal, now here it is! The trouble with trying for an option is that there are now three other offers lined up behind mine, hoping I can’t pull it off. I was thinking of contacting one or more of the high-rollers on this site to see if they wanted in. After reading your suggestion, I’m sure now that I will. BTW my $50k check was written on a piece of Rubbermaid material. The Realtor is holding it uncashed until I tell him it is good or I run out of contract time and back out of the deal. Plenty of weasel clauses.
Thanks for the support,
Michael Murray