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SteveG_Pa

What would you do?

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How would you get in the middle of setting up a land contract between a seller and current tenants? I guess I mean how would you collect your 2k or 3k fee?

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SteveG, have you read the two pinned threads on assignments and option release at the top of this forum? There might be some helpful ideas in them.

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Thanks Michael, I read most of those posts. Seems most deal with the release etc at closing, since this would be a land contract for 60 months, I dont want to wait 5 yrs lol. Read something about terms and an option but I was getting a little confused by then I think.

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Called a seller back who has a house worth approximately 25k, not in the best area of town, owes about 11k on it, needs some repairs, but mostly cosmetic by the sounds of it, waiting for a call back right now actually about getting in tomorrow to look at it. Anyway, tenants been in the property about 4 years and would love to buy it, but probably dont have any money for down payment according to seller. Seller has talked to them about buying it creatively somehow, and theyre very interested but seller doesnt have the time or knowledge to get it done. Seller said hes willing to just walk away, any way possible, he said he knows theres creative ways to do rei and would be willing to do just about any of them. As a first deal id be happy just walking away with enough money to pay the bills for a couple months and give the seller the rest, he mentioned not really having any money that he can come out of pocket with as well. Hed probably be fine if i just took it sub to or something too. I almost feel bad like hes "to" desperate to sell, sounds like this property is a huge strain at home with the family.

 

So basicly I was looking at just setting something up between the seller and current tenant, taking a cut for setting it up and walking away. If hes not interested in staying in the deal that way, Id also like another option..

 

Thanks

Steve

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First, you need to get inside and have a thorough look around to see the actual condition. Tally the cost of necessary repairs. Run the numbers to determine as-is value and the after repair value.

Then, if you can, speak with the tenants. Just how serious are they about buying it? More importantly, do they have any cash to put down? The seller has already mentioned he has no cash. Well, someone has to have some cash if you plan on getting paid for your troubles, Steve.

Also, what do you know about the lease? Month to month? How much is the rent?

If after seeing the property and talking to both parties, you determine that the tenants don't have the money and can't buy, what about offering the homeowner a Pure Option for a rock bottom price? Then market the house to some local handyman/investor types. If the deal is good and the numbers work, someone will bite and you can make some lemonade from the lemon.

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Thanks Michael. Sounds like a month to month, rent is 300 a month, everything you mentioned above is the goal when I get in there, seller hasnt called back yet to let me know if I can get in tomorrow. Just not sure how to do an option, then assign it, if either one of them can come up with 2 or 3 k that is.

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Steve, get into the property, speak with the owner, then bring it back here and let's look at the possibilities.

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Michael, got in to see it. Needs torn down lol. Tenants seem to think they have a CFD already in place, but they have no idea what theyre price is, how long they are paying etc. Seller told them 12k last time they spoke I guess tho. They pay 285 a month and love the place tho, its a 4 bdrm and they have 3 kids. Fixed income of about 1100 a month so cant afford much more of a payment either. They already pay for all the maintenance and have done "some" work on the place, but it needs ALOT more. Unless the seller can come out of pocket and I can raise the rents I dont see what I can do to help either of them.

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So you have a run down property in a not-so-good side of town. This has tenant and toilet issues written all over it. I've always been of the mindset that ugly houses attract ugly tenants. If you still want to try and make a buck with this deal, Steve, I would go the Pure Option route. Offer the homeowner the balance owed, get an option to purchase for 60 days, and give him $1 to make the option legit. Then market to the handyman/investor types and see if you can skim $2K or so off the top. Not much moolah in the deal, but no risk, either, other than that dollar and some marketing bucks and some time expended.

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Michael, could I set this up like this..

 

Tell seller I need 2k, and Ill setup all the paperwork for a CFD between the seller and current tenants. Theyll take care of any maintenance so the seller doesnt have to worry about taking care of anything but collecting the rent and going to closing. Figured id set it up at 300 a month for 48 mths. Total of 14.4k - my 2k would still net seller about 2k himself. Only thing Ive been thinking about though is what should I tell seller he can do with the deed during the 48 mths so theyre both protected, I know im over thinking it and probably already know the answer.

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Steve, for only $2K are you sure you want to take on this transaction? For one thing, from your description you have clearly crossed over the line for brokering real estate without a license. (Or are you a licensed Agent?)

As for reassuring the seller, he holds title until the buyers eventually cash him out. There is minimal risk in this deal for him. But if it makes both parties feel warm and fuzzy, place the title in escrow with a local attorney.

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Yea I know that doing something like that could be brokering, I meant id be in the middle and assign everything to the buyers, this isnt something im spending alot of time on at all, but if I could get it done swiftly and without any headaches id do it.

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Yea I know that doing something like that could be brokering, I meant id be in the middle and assign everything to the buyers, this isnt something im spending alot of time on at all, but if I could get it done swiftly and without any headaches id do it.

That being the case, then give it a go.

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