What is my next step? - Posted by Craig

Posted by Tim Fierro (Tacoma, WA) on July 19, 2002 at 10:56:20:

I don’t really think you need an offer, as the owner has offered them to you. :slight_smile: You know he wants to get rid of them, and you know from your analysis that you want them. You need to determine how you want to purchase them.

You don’t go into details, but it sounds like you are just going to assume his loan, but you don’t say if it is a non-qualifying assumable, qualifying assumable, or buying subject-to the loan. Since it is a private party, it might be easy to take over the loan with cooperation from the note holder.

You know you want the property, you know you can take over the loan, so you need a title search to verify that there are no liens or other notes that has not been told to you.

I don’t think you would have any trouble splitting the condos back into separate parcels, but you would need to check to see if they each have their own parcel numbers. If so, then work it out with the note holder to allow the split.

With the above satisfied for you, then write up the contract to suit the deal with the financing you are using and the numbers from your analysis. At this point if you don’t know how to write the contract, you could use an attorney to polish it off for you.

What is my next step? - Posted by Craig

Posted by Craig on July 18, 2002 at 21:30:31:

Looking for some advice. I have the opportunity to purchase two condos (one 1 bedroom & one 2 bedroom) both on the same assumable loan. The seller is an investor and has moved and he wants to sell. The one bedroom is vacant and needs some work, the other is occupied until August. The assumable loan balance is well below the ARV of the combined two units. My problem is, this is potentially my first deal and I do not necessarily know my next step. Basically he has said, assume the loan and they are yours. Where do I go first? What do I do? Do I need to send a formal offer with my contingency? I do not want to involve my buyer’s broker since he would have to pay commision and I could possibly lose the deal. Where/when does title insurance come in? At what point do the lawyers get involved? Remember the old saying - there is no such thing as a dumb question. You were there once too!! Thanks in advance for any advice.

Re: What is my next step? - Posted by Tim Fierro (Tacoma, WA)

Posted by Tim Fierro (Tacoma, WA) on July 19, 2002 at 24:57:44:

Post some numbers on this deal.

What is the FMV of these 2 units?
What are the repair costs to bring both up to par?
How much do they rent for?
How much is the HOA per month?
What is owed on the loan?
How much is the interest rate on the loan?

The above questions are the first thing that come to my mind that I would want to know. Do you have these numbers?

Re: What is my next step? - Posted by Craig

Posted by Craig on July 19, 2002 at 07:16:56:

I’ve done a cash flow analysis with all the varaibles FMV, HOA dues, taxes, insurance, repairs, etc. and they will generate a good positive cashflow. I would even consider fixing up the one and selling it to pay down the mortgage on the other. I just don’t know where to go from here - offer first? Title search, etc, etc? I am also concerned about the one private assumalbe mortgage. I am assuming that somehow it is a blanket mortgage and that I wouldn’t have trouble splitting the units up and selling them independently. Continues thoughts are appreciated.