verbatim

You get the following call: Daughter looking to sell her 85 year old mothers 1000 sqft 3 bed 1 bath home so her mom can move in with her. They are moving 45 minutes away and daughter does not want to leave the home vacant in deteriorating area. She will not sell on terms, cash only. There is no mortgage on the home & it comps at 65k. Daughter's asking 45k all cash in 30 days with $10 earnest money or 5k non refundable earnest $ for 90 day contract. Needs cosmetic repairs: new paint inside, carpet, & kitchen cabinets. What do you do?

Verb, yes indeed, I would be bothered by the homeowner being in arrears. That's a definite problem these days with many homeowners who are renting their property. Out of the blue a tenant finds themselves with a notice from the bank that the house must be vacated. You don't want to be anywhere near that should it come to pass. The numbers don't support a CA, either. She has no equity to speak of. Meaning you need to market this house at around $10K above value to get the homeowner to the closing table without having to come out of pocket. Who's going to meet your price? Good point on not wanting to be part of a foreclosure in the making by doing a CA. I only entertained doing it if the lender would put the missed payments on the back end of the loan making it 135k which brings us to your 2nd point. The owner will have to bring $ to closing unless the purchase price is raised. I assumed for a second that a tenant buyer wouldn't have a problem initiating a purchase today at 5-10k more than fmv as they will be buying in a year or 2, if they close as most do not. I mean I probably could list it for 137.5k and keep 2500 & cross my fingers that A. she doesnt go into foreclosure B. She has $ to bring to closing or a loan officer smart enough to put closing costs into the loan but, what are the chances of that lol

Out of state seller with a 1800 sqft 3/2 with a pool. Loan bal 130k note : $1,300 behind : $5,100 comps : 135k Other homes in the area are renting in this range although they look more updated with new paint and kitchen cabinets etc but dont have the pool she does. Aside from the fact that she's 3 months behind it looks like a good CA candidate. She says she is about to make a payment so it will only be 2 months behind. She had it listed with 3 different realtors over the past 3 years and 1 management company she was not satisfied with so she would like to sell. States she is thinking of trying to do a short sale with lender. So, would you let the fact that she is behind stop you from attempting a CA? If not how would you structure it?

Update! Update! Update! So does this strategy work or is jvmccall doing push ups in solitary confinement???

update: I called him back to let him know the deal was slim due to current market conditions and he said he was going to list it with a realtor for 175k. i should have asked him how long that would take and how much he would net but i didnt. oh well

Michael, Thanks for the great reply. I know a similar home is advertised for 185k with $4500 down and $1695 a month rent so hopefully my rent is realistic. I probably should lower the option price to 175 with 4500 down so they onl have to get financed for 170 in a year though right? I think he should probably pay me something which is why i was going to ask that he pay the next 3 mortgage payments for an additional $4,200. I also planned to make this agreement subject to me finding a tenant/ buyer. And no, I couldn't afford to make the payments in the interim:-(

Here are the details: 4 bed 3 bath needing no repairs in nice area. 1400 month mortgage he says Owe 145k comps are 173k He has relocated out of state so he's now making two payments for over a year. He listed it at 182 1 year ago with no hits. He doesn't want to rent. May leave loan in his name. States his objective is to net 6k cash. i offered to buy for mortgage balance or l/o for $1400/month at 170k purchase price with 36 month term. This is when he stated he doesnt want to rent since he is out of state and asked for 6k to "cover repairs made." Im thinking offer 3k and take over payments subject 2 if he gives me time to find a tenant buyer & makes the next 3 payments. I'll try to sell at 179k getting $4500 down & rent for 1600/month so. If you can tell me what you would have offered & offer any me advice that would be greatly appreciated. Thanks in advance

These deals are in TN. Deal 1 will rent for 1400/1500 per month. It has been empty for a year because the owner got married and moved in with her new husband 1 year ago. Deal 2: You are correct Mike, she could stiff me. She gives the impression that she just wants to relocate out of state because her boyfriend was mugged last weekend and she was mugged 1 year ago. I have learned not to have sympathy for sob stories because if they think you're their friend the accidentally miss payments on purpose and expect sympathy. the home is in a desired part of town and will rent VERY easily.

deal 1: owner will sell for 86k [loan balance] comps at 130/140k needs 4k in repairs for rotten wood around window sills.- note is 1k/month. It has been empty for one year and note is current. He says they are moving out of state as well but later made contradictory statements. I basically believe he doesnt want to put the time into repairs & listing it. 86/135=63.7% ltv ------------------------- deal 2: duplex - owner will sell for 200k [loan balance] comps at 245k - needs no repairs - note is 1800/month - tenant is paying 1k per month and owner boyfriend pays $800. The current tenants lease is up in June. Owner will sell to me now and rent until they relocate out of state in June. She says her side will rent for 1250 so should i rent it to her for 1k for a $200 profit or the full $1250 until June? She is thinking about not paying any more notes for the next 6 months and using that money elsewhere if she doesnt find a buyer. 200/245=81.63% ltv ------------------------- I was thinking sub2 entry method as both owners may dissapear. Exit for the 1st can be cfd w/10% down, l/o with 3% down [but may still need repairs so tenant can qualify for loan] or i can fix & sell myself. Exit for 2nd can be to rent both sides and keep the $300 or $400 cashflow and keep my fingers crossed that both tenants do not become additions to the daily growing list of unemployed individuals in this country. I dont really want to be a landlord though which is why this is not really an attractive option for me unless someone can show me the benifit. Since there is a strong chance that i have missed something regarding the best way to get in and out of these deals i would love to know what other investors would do... Thanks

Seller relocated out of town with her job & is stuck with a 875 note. It’s a 3 bed 2 bath no repairs needed – nice house nice area Appraised at 147 2 yrs ago Now comps around 125 She will list it for 120k for a quick sale Owes 94k I’m guessing she’d net 10k after getting around 104 if she went the realtor route But she doesn’t want to have it sit for months to sell. She’s open to a 3 year l/o where I cover her note but I haven’t given her any terms if I decide to go that route. What kind of offer would you make to her? Any help offered would be greatly appreciated. Thanks

How would i figure out what the banks "cost to foreclose" would be on a property? Is their a general formula of some sort that one could use?

Thank you kind sir, great answer. So do i just put $1000 on line 101 by contract sales price, and leave every thing else blank. Or just fill in unpaid tax info and miscellaneous closing fees and have the contract price be the sum of the fees plus whatever will make the net amount 100?

hud-1 for 2nd when 1st hasnt discounted yet 1st payoff 72k 2nd payoff 15k What should I show on the pre-liminary HUD-1 to the 2nd as part of my short sale package? contract price is 52k & i will offer the 2nd 1k but im not sure how my hud to the 2nd should look? any help offered would be greatly appreciated, Thanks

the particulars: - 4 bed 2 bath with no equity. - 87k loan on property. - Repairs: bathroom needs to be re-done [tiles etc] kitchen is outdated, wax floors because carpet has been pulled up. - her mortgage company is open to a short sale, they want her to list it and see what offers she gets on it. - she doesnt want the liability of being a landlord but once i told her the tenant would be responsible for the repairs & treat it like their home she became very receptive to the idea of a c/a. - she may not be able to make next months payment i was told when after asking her to cover next 90 days payments. - 990 note I'm thinking go the c/a route but would like to know if anyone else see's additional avenues that can be taken? I also am guessing that if i went the c/a route i may not get a buyer before the end of the month putting the home behind on payments. what would your exit strategy be?

Thanks for the reply, I was thinking the same thing except maybe doing a coop assign on deal 1 but I'm not sure if people will put a few thousand down on a home they'll have to pay 100% value for when they get financed later with no rent credits? Deal 2 seems to have cashflow & MAY be worth leasing for 36 buit this may become unattractive later depending on prime.

Hi all!! deal 1: Owes 80k, worth 80, and she doesnt want it. she says payments are current but she's living check to check and feels she may not be able to keep current for longer than a few months. I told her i can lease from her if she's comfortable with it staying in her name until tenant qualifies for financing. Average rent: unknown her mortgage: $740 deal 2: wife in process of divorcing & says husband will sign any papers. She bought 2yearss ago, owes 90, worth 90, has been listed for 1 year and realtor told her that with the foreclosures folks arent buying and she'd have to come up with 5-7k for realtor commission and closing costs. She has an interest only heloc of which 87 of the 90 is used. The payments are currently 500 but fluctuate with prime of course. She has a tenant in it paying 900 /month whose lease is up in june. Has told me she'll "give it back to he bank if no one buys it. what would you do in these situations? any ideas offered would be greatly appreciated, thanks

Option8, in my attempt to find posterboard similar to what you describe, i have only come across extremely thin yellow posterboard at officemax that looks like it would just blow in the wind if nailed to surveyor stakes. How thick is the posterboard you sue and do you have that problem. I am looking for corrugated yellow plastic and have been told by sign companies that they sell it for $6 !!! Anyone know a cheap source for that?? I bought some yellow yard sale signs thinking i may write on the back rent 2 own but i think one may still see the yard sale part better than they would my writing. i have attempted to attach a pic of how it looks. hopefully it shows up. please help. http://groups.msn.com/_Secure/0WACbArcXKy8...480319388845365

doesnt this method cause you to recieve calls from individuals who dont qualify and are just wasting your time? Verb

thinking of using either: Rent to Own! 50% rent credit!! Terms! Motivated! Great pty! 3BR, 2BTH, 1400sf, Whitten/Reese Rd $1,000/mo. phone number www.xxx.com or Motivated Seller, 3/2, 1400 sq ft. Mike xxx-xxxx. www.xxx.com just curious, Verb

thanks for responding Mike i said 2k to seller thinking that if Purchase Price: $115,000 Rent Credits: - $ 5,400 Option Money - $ 2,600 Net to Seller: $107,000 and they owe $105,000 leaving 2k if it's financed in 12 months. The prepay penalty is a 3 yr one by the way. everything you said makes perfect sense too. Verb FMV is 115k on the home currently

i have a seller now open to a COA who has a home worth 115k & owes 99k on the mortgage with a 7% prepay penalty[6k] for a total of 105k. home can rent for $900/$1000 & with a 50% rent credit on $900 that would be %5400 in 12 months. so the #'s i have come up with to offer the owner look like this: $105,000 Seller/Lessor’s starting price + $5,400 Rent credits for 12 months = $2,000 Total price Seller/Lessor will receive + $2,600 Assignment fee = $115,000 Total price The Property will be marketed at. Are my #'s off or did i do something wrong? what would you change? Any assistance given is greatly appreciated, thanks

how has the response to hte ad been?

wheres the link to the mp3?

they asked why she couldnt pay and what her finances are like currently. I told the cust service rep that i have someone wanting to rent it out form the owner but i want to get the backpayments straightened out 1st. I said raising the payments wouldnt work because she can rent it for a little less than the monthly payments. I was then told thatits not possible to put the payments on the end of the loan & that i should have seller call to give financial info. Since she was not in loss mit i dont know how seriously i should take her claims. What did i do right/.wrong and what should i say when i call back? Verb

I have an authorization to release form and called a lender to negotiate a forebearance agreement. they said they wouldnt be able to put the arrears for the past 4 months on the back end and i should have the owner call them. This was the lady who answered the 800#, a cust service rep i guess. I should have asked to speak to someone about working out a forebearance agreement maybe. What should my next step be? verb