<Steve> 82 Report post Posted April 14, 2004 Hello Everyone- I currently have an investment property I own coming up vacant and am going to advertise it for sale to see if I have any bites before re-renting. I purchased the property at around 60K two years ago and the Market Value is around 75K. As the market is a little slow for this type of property right now, I am thinking of advertise it with something like: "...up to 5K cash to the buyer at closing for a quick close..." Does anyone see any problems trying to hook a buyer this way other than 5K off the top? I am looking for a convention sale. <Steve> Share this post Link to post Share on other sites
-Tony- 0 Report post Posted April 14, 2004 How a bout Rent to own low down 3/1 1/2Family neighborhood bruised credit okay 50% rent creditcall steve @ XXX-XXXX Seems like if you were renting before why not do a R-T-O. Tony Share this post Link to post Share on other sites
Guest Guest Report post Posted April 14, 2004 That's a good idea Tony- But with this property I don't want to hang on to it. Would rather move it quicker. It needs some plumbing work so thinking to offer cash at close the buyer would have $ needed for repairs and some extra in their pocket. I don't see a problem giving cash back to the buyer; however, not sure how lenders would view it on the buyers end. <Steve> Share this post Link to post Share on other sites
MichaelC 160 Report post Posted April 14, 2004 Steve, I'm with Tony on this one. Offering a Rent to Own, using a 50% rent credit as incentive for the tenant/buyer to come in and do the necessary work, should free you up of the usual maintenance and repairs headaches. If your preference is to just sell it, though, I think you can work out a deal whereby the buyer receives cash back at the close without the lender becoming uppity about this. Why not run the question by a mortgage broker you know and see what he/she says? Share this post Link to post Share on other sites
<Steve> 82 Report post Posted April 15, 2004 Thanks MC I will most definitely run a rent to own with the 50% rent credit when the current tenants move out in a few weeks. Just though I would try a straight sale to see what happens. I'll ask Andrew if lenders would frown on giving cash back. Thx Share this post Link to post Share on other sites
Guest Guest_Chris&Kez Report post Posted April 16, 2004 Where is the property located please? Kez Share this post Link to post Share on other sites
<Steve> 82 Report post Posted April 16, 2004 Hey Kez- The property is located in Greensboro, NC. Condo2bd/2ba 1140 sq.ft, frpl, poolnear historic park, nice side of town Steve Share this post Link to post Share on other sites
Andrew Ikeda 0 Report post Posted April 17, 2004 Hello Steve and Everyone, First, lenders dont like it when sellers give cash back to buyers at closing. There are reasons for this but the main reason (as I understand it) is that lenders think that two investors are setting up a transaction to both profit from it. For example: say Steve and I agree that I will buy his condo for $85,000 and he (Steve) agrees to kick me back $10,000 for buying it from him. Steve is highly motivated so we make this agreement. Steve can still get $75,000 and he only paid $55,000 for it three years ago. Maybe I'll agree to split the $10,00 with Steve just for providing the asset/comodity. See the picture here? Now imagine your a lender and you've got the dough. How would you review this transaction and would you be willing to lend on this transaction? Lenders do allow money to go to third parties and it must be shown through or by a letter of instruction to the escrow officer. Last month, I had a realtor/investor try to do something like this. He found an REO that needed more than cosmetic repair and asked me to find a lender that would give him the money to use for repairs. What I discovered is that the lenders will close the loan AFTER the repairs are made. They are concerned that the rehab work wont get finished or it will be done sloppy and they've already got the financing in place. Also, they are avid believers in appraisals and trust the appraisers and what they say and for good reason too. It is difficult for an appraiser to put an accurate value on work-in-progress. So what they do is make a loan 'subject to' repairs being satisfactorily made. In regards to marketing the property, this ad works very well for me and can for you if you want me to help you sell it: Greensboro Condo by motivated seller, 2bed 2 bath, 1140 sq ft, pool, possible 100% financing, seller to pay up to $XXXX (or X%) of closing costs. Price. Phone number. When the phone rings (and it will on this ad - I average 35 calls per ad) tell them that you are working with a loan officer that specializes in all types of financing and credit scores including 100% NOO. Then call me or have the interested party call me and I'll help you get the property sold. In this case, I make my living doing the loan application/financing and you as the investor dont have to pay me a referral fee or bonus or whatever. You win and I win! Not to mention we'll get rich quick! and establish a great working and personal relationship... ok but not too personal, ok? Another little trick you can do (and I've done this on ALL the deals I've done) is to add the closing costs into the sales price and then advertise that you will cover the closing costs! This works as long as the sales price is at or under the appraised value. It's easy! Ok, I'll stop here and take a break! Andrew Ikeda (Mortgage/Investment Specialist) US Funding Group, Inc. 888-889-1640 ext 220 360-433-6820 direct line 360-909-3374 mobile andrew.ikeda@usfundinggrp.com and/or andikeda@netscape.net Share this post Link to post Share on other sites
<Steve> 82 Report post Posted April 18, 2004 Thanks Andrew some great ideas. Greensboro Condo by motivated seller, 2bed 2 bath, 1140 sq ft, pool, possible 100% financing, seller to pay up to $XXXX (or X%) of closing costs. Price. Phone number. I know I would call an add like this one. Another little trick you can do (and I've done this on ALL the deals I've done) is to add the closing costs into the sales price and then advertise that you will cover the closing costs! Or possibly combine both of these. I have an ad coming out tomorrow, hopefully with some calls, and will include these options in my bag of tricks as well. <Steve> Share this post Link to post Share on other sites
Andrew Ikeda 0 Report post Posted April 18, 2004 Alright Steve! We will hope for the best on the ads. This should work especially well because you can tell any and all parties about me and therefore be somewhat neutral when discussing price and terms. We can build credibility on each other. In my experience about half of the calls will be from other investors. They will think that you might finance all or a good portion of the loan amount but if you can refer them to me, I'll explain how they can get 100% financing without you carrying any part of the contract! Again, it's very much a win-win for everyone involved. One last thing on the closing costs: be sure that the new value is at or below the appraised or FMV. I'm sure you already know that but just thought I'd bring this to your attention. If you want to net $75,000 after closing, I would price it around $80,000 or around $79,900. Then in the ad: ..."....seller will pay all closing costs". This should work like a charm for you if there are no other creative ads in the same newspaper (which I doubt there will be). The key words will be: 'motivated seller'; 'possible 100% financing' and 'seller pays closing costs'. Good luck Steve and keep us posted on how this all works out for you. Andrew Share this post Link to post Share on other sites
<Steve> 82 Report post Posted April 23, 2004 Good response from my ad this week. I showed the property this evening to an investor. He likes it and wants to make an offer. Great, I thought, will see. He called me back and wanted additional info. as he is crunching numbers. We are both out of town this weekend, so I should get the offer first of next week. It will be interested to see what he comes up with. The buyer is a relatively new investor and I am looking forward working out a win-win for both of us. Thanks for everyones' suggestions. I used them as different options in which the buyer had some choices with his offer. <Steve> Share this post Link to post Share on other sites
Andrew Ikeda 0 Report post Posted April 23, 2004 Right on buddy!! You rock Steve, you rock!! Keep us posted on how this fairly new investor turns out! Andrew Share this post Link to post Share on other sites
<Steve> 82 Report post Posted April 23, 2004 Thanks Andrew- The seller seems interested in the 100% N/O/O, so I may need to catch up with you next week. <Steve> Share this post Link to post Share on other sites
<Steve> 82 Report post Posted April 23, 2004 The "buyer" is interested. duuuu I am not used to having my selling britches on. Share this post Link to post Share on other sites
MichaelC 160 Report post Posted April 23, 2004 Cash it out, Steve. The Mrs. has her eyes on that $400 pair of hand sewn high heels from Italy. Share this post Link to post Share on other sites
