Thinking out loud about a deal... - Posted by Jim Beavens

Posted by DanM(OR) on June 15, 2000 at 10:19:07:

Beaverton. Some friends here in Bend have been trying to sell it for about 6 months now. Its vacant and it appraises at about $240,000. They owe $206,000 on a first and second and are willing to sell it for that to a cash buyer(Ie. a new loan). They would also do a Lease/Option for around $1800/month with some cash down.

The house is huge, heck you could play basketball in their masterbedroom. I believe its a four bedroom 2.5 bath.

They are very motivated and may not be able to handle many more double payments.

Give me a call if you are interested or have buyers in Beaverton. They are willing to be creative and I am helping them setup the terms and paperwork.

I hope all is well with you. I haven’t seen you in a while. Was it Atlanta or Park City ?

Give me a call!

Dan Matejsek

Thinking out loud about a deal… - Posted by Jim Beavens

Posted by Jim Beavens on June 14, 2000 at 23:45:27:

I talked to a seller today about a 3,600(!) sq.ft house. I was inspired to call on this ad because the asking price is $225k, and around here it’s kind of rare to see prices less than $90-$100/sq.ft (if you’re from Oregon, this is in Beaverton). Also, the ad mentioned flexible owner-carry terms. Anyway, here are the details on the house:

  • The house was built in 1956, and this seller is the original owner. He’s had it for 45 years, and owns it free and clear.

  • He moved out last August and moved into a retirement community. It’s now vacant (although he’s obviously not making any payments ;).

  • It appraised one year ago for $243,500 (he mentioned that he’s added 2 additions over the years, so I suspect he’s improved it more than comparable homes in the neighborhood). A current value of $250K wouldn’t be out of the question.

  • He said that if a buyer got a first mortgage for $150K, he would be willing to hold a $75K second, with interest-only payments and a 5-year balloon.

Based on that last item, I determined that he was pretty flexible, so I made an appointment to meet him at the house tomorrow. Now I wish I had gotten more information on what exactly his needs are, but oh well I’m still learning. =) I’ll just find out tomorrow. He didn’t sound terribly motivated, but he did sound easy-going and flexible. I just get the impression he doesn’t care a great deal, because he knows no matter what he’s getting a whole lot of money. =)

What I need are suggestions on different kinds of offers I can make. It seems like the sky is the limit with something like this.

Some possibilities:

  • $175K cash only.
  • $150K cash with a $50K second (I’ll give you your cash but for a lower price
  • $100K cash with a $125K second (I’ll give your price but with less cash).
  • Lease-option for $225K. This is the most compelling to me, because the payments can potentially be a LOT lower. In fact, if he went for this, depending on what the payments were, I could see me moving into such a house for myself (my wife’s been bugging me that she wants to move, and man that just keeps screwing up how I look at deals ;).

Anyway, I just wanted to get my thoughts organized, and figured I might as well do it here on the board in case anybody has any thoughts. I realize that with what he’s asking, this deal is fairly skinny, but I figure I could use the negotiation practice anyway. =)

Happy investing!