How hard is it to find deals with equity?

[Guest Guest_verbatim]

I was told that homes listed on the MLS sell for an average of 97% of the asking price in my area by a realtor[ i saw the printup]. Being that this is the case why would anyone with less than 80/85% equity call our signs & not sell with a realtor. [ aside from the fact that they won't have to wait 3 months for it to sell]

 

Now i am not knocking the sub2 method at all or saying it won't work, this will be one of my key buying methods. I am discouraged though because my signs are bringing in calls from MANY people with no equity. I now think i see why, they can get what they ask for by listing if they want to wait a few months for it to sell.

 

I love talking to those that respond to my signs but hate that no equity is there for me to take advantage of.

 

Any words of inspiration given would be greatly appreciated.

[mpine 0]

People looking to deals with us do not have the equity to pay a realtor there commision and are very motivated to sell due to duress or just plain simply moving to another area due to relocations or what not.

 

We market to motivated sellers.

 

Best wishes,

 

Mike

:ph34r:

[MichaelC 160]

verbatim, one of the advantages of lease purchasing is that you can do deals and profit even when you pay full price. Of course, we all prefer to control properties for fifty cents on the dollar. But, in the real world that ain't gonna happen every day. You will find many sellers contacting you with a property worth $200K and the mortgage balance close to that. What then? You can walk if it makes your nervous, or you can think creatively and make a profit.

When this type of deal is presented to me I tell the seller I can help them get out from under those payments and help them sell their property without paying Realtor's fees and without paying closing costs. Which is exactly what they need to hear.

Let's say they owe $192K on that $200K house. No equity? No problem. My offer: a lease with option to purchase for as long a term as I can get; my monthly payments equal to their's; my option price equal to their balance.

Now that I've taken control of this property with nothing out of pocket,m what can I do with it? Assign the deal for a quick assignment fee. The advantage to the end user is they lock in today's price for, say, three years. No financing worries for now. That's worth something to a lot of wannabe homeowners out there.

If the rental market will bear it, perhaps I can just use it as a rental in the meantime. If any appreciation occurs during my lease with the seller, it's mine. At some point I can decide if I want to buy the house or simply sell if for a profit.

If the market is very strong, even paying full price I may be able to mark it up enough to a tenant/buyer so that I can receive option money, monthly cash flow, and potential back end profit, too.

So, you see verbatim, you're walking away from profits by walking away from no equity homeowners. Think creatively and start turning these lemons into lemonade.

[verbatim 1]

Thanks MikeC

 

 

But if the property value goes down what do you do?

 

And if the person you put in the home stops making payments what do you do?

 

Do you make the payments & take the loss or what?

 

These are questions i cant answer?

 

Verb

[MichaelC 160]

But if the property value goes down what do you do?

Another beautiful advantage of lease purchasing. If values decline, you're not yet the owner, are you? You can simply walk away at the end of the lease and return the keys to the homeowner.

And if the person you put in the home stops making payments what do you do?

Call my Uncle Tony. He has a few methods for guaranteeing timely payments ....

Actually, you must accept the fact that occasionally as a homeowner/landlord you will be required to make a payment on a vacant property every now and then. To think othewise you are in denial. Now, our goal as successful investors is to reduce these payments to a bare minimum. While lease purchasing cannot guarantee you this won't happen, think logically about the mindset of your typical tenant/buyer versus your typical tenant. Who is more likely to be on time each month and more responsible towards the property? Again, there are no guarantees. But, we are always trying to tilt the odds in our favor.