Posted by Ken on December 07, 1998 at 11:55:09:
I’ve been reading the group for a while with a lot of interest, and I’d like to say thanks to those who reply to others question, because it has also helped me understand better. Now I have a question…
I found what may be a deal last night. It is a package of 2 houses (3br/2ba & 2br/2ba) and a duplex (2/2 & 2/2). All are side by side. Asking price is $139,900 and listed with an agent.
I spoke with the selling agent last night, and she says the seller is “tired of being a landlord.” This has been up for sale since August. All units rented, for $2080 total a month.
3/2 house 650
2/1 house 450
dup 2/2 #1 485
dup 2/2 #2 495
There is an assumable with $91k left on first morgage @ 7.5%, and a $33k 2nd mortgage (non-assumable). Payment on the 1st mort is $1167. She says the seller has ~8k in equity.
I have an agent that is going to pull comps for me on the area and check the deal. I’m going by later today to see the area, but off the top of my head, I’d guess the houses are worth around $50k-$60k a piece.
I’d like to ask the seller to put the houses in a trust, and asign me as beneficiary, but I’m affriad since it is listed with an agent, that route won’t work.
With the 91k assumable @ 7.5%, and my exellent credit history, I’ll have no problem with that. The problem is the $33k 2nd and his equity. I’m now thinking I should give $130k for the deal (91k + 33k + 6k).
Then I’d turn and sell 1 or 2 of the homes at $50k/home, pay off the my new 2nd mort ($40k) and 1031 exchange the remaining and keep the assumable 1st mortgage.
(of course this all depends on comps of the area, but I’d like to get someone else’s idea on this)
One other variable is $10k I’m sitting on, but I would like to leave it, or majority of it in cash at this time.
All responses will be appreciated…