Trading Properties need Suggestions - Posted by Michael

Real Estate Investing
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Posted by Marty Weisberg on November 24, 2000 at 15:59:53:

Michael,

My suggestion for having them refinance or take a second out was to keep you from having to come out of pocket with any money. If you can and don’t mind doing so you can certainly give them the money that they need.

Since they don’t want to advertise before they sell the property…that should work to your advantage…and I think the land trust is perfect.

You should look at the PACTrust…It may not be necessary to do, if you just flip the property but will be there if you hold on to it. Check www.landtrust.net for more info on the PACTrust or if you like call me (561) 998-8521.

Marty

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Trading Properties need Suggestions - Posted by Michael

Posted by Michael on November 24, 2000 at 24:36:44:

Some of you already know that I am a Builder. Here’s the scenario. I’ve got two clients interested in building new homes, both are anxious, but need to sell their homes first.

Client number one has a home worth $130,000 owe $70,000. The plus is they don’t think it’s worth that much, but the land was a gift to them, so all they paid for is the house, plus they have added on to the house. They live next to the husbands father who is trying to run their lives and they want out. What I need to figure out is,

  1. The best way to free up there credit to get a new mortgage
  2. Buy their property in a subject to or lease option, or some other type of creative financing

They would be tenants throughout the construction of their new home. They would need about $25,000 from their current home to buy the new home.
$70,000 + $25,000 = $95,000 Buy
$130,000 - $95,000 = $35,000 Net Sell (Potential)

Plus $18,000 Profit on their new home.

Total Potential $53,000, I could settle for $30,000.

Please help me structure this deal in a way that would allow them to get new loan. Please advise me on which course if applicable would have all the documents I would need.

Client number 2 is similar, but client’s current residence is 2 hours away, and not the client is not as motivated.

Thanks in advance for all of your suggestions and advice.

Sincerely,
Michael Meeks

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Re: Trading Properties need Suggestions - Posted by Marty Weisberg

Posted by Marty Weisberg on November 24, 2000 at 07:23:25:

Michael,

Here is what I would do. First off I am assuming that the seller’s have reasonably good credit since they are looking at buying a new house.

I would have them take either a second mortgage on their current home or refinance it so that they could get the cash theat they need for the new property.

Then I would have them put the property into a land trust. After putting the property into a land trust have them make you a beneficiary of that trust. I like to take a 90% interest. At this point you could go ahead and either sell the property outright if that is your desire or you could go ahead and bring in a resident beneficiary. Have them come up with enough money to give you what you need or want. If you do it this way (of course there are more precise details to follow) the Seller will be able to get his financing for the new loan.

Marty

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Re: Trading Properties need Suggestions - Posted by Michael

Posted by Michael on November 24, 2000 at 15:20:12:

Thanks Marty,

They don’t have great credit, but they are pre-approved for $120,000, but must provide a letter of explanation. The house they are wanting will be around $125,000. They will need at least 5% down, but they also want to finance closer to $100,000.

My thought was give them $20,000 and take over their notes, I would still have $40,000 in equity of there existing home, and I would get most of the other $20,000 back as a contractor fee.

They don’t want to advertise their property as long as they are living there, due to the feuding with the husband’s father. Therefore, it will be difficult for them to sell the house.

Knowing this, do you think the “Land Trust” is still the way to go? What course would have the information and documentation I would need?

Thanks again,
Michael