Re: What can I do with this Prop/Owner - - UPDATE!! Help me land my FIRST deal! - Posted by B.L.Renfrow
Posted by B.L.Renfrow on June 04, 2000 at 08:23:12:
Glad to hear you took the suggestion to go sit down and talk with the seller! That’s always a good starting point:-)
From what I gather, it appears the seller’s real NEED is to be rid of the monthly payments so they can relocate, as opposed to a need for immediate cash. With that in mind, how about a subject-to offer, where they place the property in a land trust and you “assume” their loan? Although it may sound intimidating the first few times you read about it, that is not difficult to set up and can be done fairly quickly.
To know whether this is a viable option, you need to know the seller’s mortgage balance(s) and the amount of their monthly PITI payments.
If the seller has significant equity, how about seller financing, or a land contract? Or, if none of the above will fly, your idea of lease-optioning from the seller is certainly reasonable…although I would try to get a 12 month term with at least two renewals. If you go this route, you want to be sure your financial situation will permit you to obtain financing to exercise the option down the road.
I don’t recall what you said the comps run in your area, but if the $134k is significantly under FMV, I wouldn’t push too hard on that, especially if you are not offering cash at closing.
Now, it is your job to convince the seller why your offer is better than listing with a broker. You do that by doing your homework, projecting confidence and acting like you do this all the time, even if it is your first deal. Anticipate the questions the seller will ask, and answer them up front. Mostly, they will be concerned about what will happen if you don’t pay, and they will want assurances you will do what you say you’ll do.
You can point out how, by doing this deal with you, they can have this problem solved at once and get on with their move to California…while listing with the broker may mean MONTHS of waiting…and WHO is going to make their mortgage payments while they are waiting for a buyer? Certainly not the broker! And since they don’t want to be landlords, discuss how they won’t HAVE to, if they accept your offer. Describe how you will take care of the property as an owner, be responsible for all maintainance and repairs, and all they have to do is watch their loan balance go down.