Posted by dan nj on April 20, 2006 at 14:39:23:
Thanks for the advice. The house is in a great area near the shore. I am not at all interested in a time share situation so I hope to find him another home to stay in and deed his vacant to me. If he insists on staying in his home I don’t know what my options are??
Once we get past that we can move onto price? how long he wants his 2wks? can he hold all/some mortgage? etc
vacant HO wants access to home 2wks each yr - Posted by dan nj
Posted by dan nj on April 18, 2006 at 20:13:50:
I tracked down the owner of a vacant home and finally sent him a handwritten letter asking him to call me. He called right away and was totally willing to deal as long as he can stay in the home 2wks each yr as a vacation home. THe house needs a bunch of work. Realtors haven’t had much luck getting him to list because they can’t deal with that sort of stipulation. My plan to to rent and hold (think john schaub). I can’t foresee booting tenants out for 2wks each year so I think I’d have to find/pay for another home he can stay in for 2wks each year. Here’s what I’m thinking:
1). I’d pay it out of a HELOC on the fixer upper (after a good sales price & repairs). After the pre-determined agreement (as to how long he has access) goes by my cahsflow increases and so I pay down the HELOC if there is a balance.
Of course this is assuming I am crazy for thinking I can just have tenants leave the home for 2wks/yr. Oh and one more thing, the upstairs is unfinished and was supposed to be a duplicate of the 1st floor (kit, bath, 2-bdrm, living room) but If I do that I’m unsure of what constitutes a legal 2-family.
Thanks in advance!
Re: vacant HO wants access to home 2wks each yr - Posted by Joe
Posted by Joe on April 19, 2006 at 10:07:17:
I’m guessing this is a bit of a resort town - perhaps in the mountains or by the coast. If this is the case, look around at the other rentals in the area and see what they cost for 2 weeks … $1k? $2k? Then offer the guy enough money to rent one of these other homes for 2 weeks for the next 2 years. Or even reserve one for him if he knows what 2 weeks he wants.
Re: vacant HO wants access to home 2wks each yr - Posted by Eric Woolhiser
Posted by Eric Woolhiser on April 19, 2006 at 09:13:20:
Is this the sort of deal you normally do in your investing business?
Essentally what you’ve described is a time share. You could split up the deed into 2 week blocks of time, and buy the 25 deeds and let him keep the 26th.
Time shares are great ways for builders to sell vacation property, but they are a lousy way to buy property.
My original question is: Is this what you normally do for investing. If it isn’t you, should not try to conform yourself to fit the deal. The deal either makes sense to your business or it doesn’t. If you don’t already have a process for this, I suggest you pass on the property and look for another deal.
The other thing is to get the seller to deed you the whole property. Get him to recognize that his “offer” is not very marketable which is why REALTORS® in general do not want to deal with this headache.
I know this lady who thinks she’s a brilliant re investor, and she just went through a tripple foreclosure, including her primary residence.
She wanted to do a sale lease-back with her staying in as a tenant. She wanted me to find a investor who would capture 40K from the deal in a short sale, but since the investor was getting “so much money” she felt she should be able to stay in the property RENT FREE.
I tried and tried to get her to see that her offer was simply un-marketable. I approached many investors, but it was just good for a laugh.
Well, she’s doing a chapter 13 now, God bless her, but she’s not worth my time.