URGENT! - Posted by LeonNC

Posted by Bill K. (AZ) on March 10, 2000 at 10:11:42:


Getting the seller to make the next 2 or 3 payments is a good strategy. You know, even if the seller found a buyer today, it is likely that they will make 1, if not 2, more payments before the close.

In fact, I remember Ron LeGrand saying at the convention that it might be easier to get the seller to accept making the next few payments by explaining it to him/her this way. “Mr Seller, if you can’t sell your home in the next couple of months, who’s going to make those mortgage payments? Anyone YOU know?” I thought that was funny.

Bill K. (AZ)

URGENT! - Posted by LeonNC

Posted by LeonNC on March 10, 2000 at 02:03:33:

I’ve talked with a few others on the board about this but I’m looking for others input. I’ve found a lady who is motivated. She has a house that is worth 240k. She recently accepted an offer for 229k which fell through. She owes 190k. Her payment is 1600 and I’m pretty sure I could rent the house for at least 1900. I would be interested in sandwich lease optioning the house and I’ve got a good idea of the numbers I will offer but it’s the terms I’m concerned about. I do NOT want to have to make any of those 1600 a month payments. One suggestion was to make the offer contingent upon finding a suitable tenant buyer. This is appealing to me but I’m not sure she’ll go for it. Does anyone have any other suggestions that might reduce my risk and get her signed up? Let’s say she’s ready to do the deal but also doesn’t want to make the payments. What options do I have? Thank-you.


Re: URGENT! - Posted by Bud Branstetter

Posted by Bud Branstetter on March 10, 2000 at 22:15:22:

One alternative is to make the payment but get it as a rent credit at the end of the term. You pay 11 mo she pays for 12th. Or more likely she doesn’t and you deduct from the purchase price.

I would not do unless I can purchase for 220K.

The other question is this house in the 80% range of houses within a mile or so. If it is a larger house that will take longer to fill you want to reduce your risk. If it is an average rental price then you should know your area as to how long it will take. In the DFW area that house would take 45 days. Ask for 60.

Re: URGENT! - Posted by Tarun_md

Posted by Tarun_md on March 10, 2000 at 16:04:23:

Hey Leon,
How are you?
The way I would explain things to her is by saying that you need some time to find the right kind of subtenant/buyer. Try to shoot for 3 months. If she insists that she cannot make the payments for 3 months, tell her that you will start making the payments as soon as you find someone.
Here is what I did on a recent l/o deal. The sellers didn’t want my payment to begin in 2 months. They were willing to settle for 1 month.
I told them that If I find someone in 30 days I would start making their payments. However, If it takes me longer than that, I would simply add the extra months payment they had to come up with, to the purchase price. This made them feel good and they accepted my payments to begin in 2 months.
Hope I haven’t confused you.
Tarun Saighal

Re: URGENT! - Posted by Brandi_TX

Posted by Brandi_TX on March 10, 2000 at 08:31:29:


You said, “Let’s say she’s ready to do the deal but also doesn’t want to make the payments.”

What will she do if there is no deal? She will either make the payments or default. Find your posture. I am not saying to go to her with a “without me you are screwed” attitude, but realize that you are the one to decide what you will do. If you are not willing to make the payments until you find a T/B, then YOU have no deal. (Not that there isn’t one there, just not one YOU are willing to do.)

Figure out what you are willing to do, make your offer, and know what is the most you will deviate from it. If she likes part of your deal but doesn’t want to make any of the payments, decide what it will be worth to you to take that risk.

She has 50k in equity, I am not sure what you are planning on offerring, but if she doesn’t like your terms, couldn’t you try to negotiate getting more of her equity in exchange for your higher risk? Would an extra 15k make you more willing? Would an extra 15k make you bust your rump to ENSURE you get a T/B in there quickly?

Just some food for thought, Leon. Besides, until you know if the loan is current, you don’t even know if waiting for a T/B is such a wise idea. You also have no way of knowing if she will require a chunk of change up front.


Re: URGENT! - Posted by B.L.Renfrow

Posted by B.L.Renfrow on March 10, 2000 at 07:41:46:

I have also found that most sellers are not willing to accept a L/O contingent upon finding a T/Ber - for the obvious reasons, unless they are desperate.

I have had better results with structuring the terms of my lease with the seller so that my payments don’t start for 60-90 days. My sellers know I will be putting a T/Ber in their home, and I just explain that it will take some time to find a QUALITY tenant/buyer with whom I am comfortable, and, “Mr. Seller, I’m sure you can see I don’t want to put just anyone in your home, and that may require a little time.” The sellers almost always appreciate - and understand - that reasoning, so it’s rare for them not to go along. The only exceptions would be if they’re already stretched too thin and just can’t realistically afford another 2-3 months of payments. Of course, if they’re in financial trouble, I’d be more interested in a deal which will get me the deed now, rather than a L/O.

Obviously, you need to be sure you can GET a qualified T/Ber at the price and terms you need, or you WILL be stuck making the payments after the 60-90 days, but if you know your market as you should, before making your offer to the seller, you should be OK. Plus, if you are able to find a T/Ber right away, their first 2-3 months of payments are all yours!

Brian (NY)