Any Advice On This Deal? - Posted by Bryan(AZ)

Real Estate Investing
1

Posted by Six on March 30, 2001 at 12:50:48:

Bryan, what part of AZ are you in? I may be able to help with the cash.

2

Any Advice On This Deal? - Posted by Bryan(AZ)

Posted by Bryan(AZ) on March 29, 2001 at 19:35:52:

I ran into a FSBO the other day. It looks like this-

Asking price- $59,000
Owner will carry @ 9.5% for 15 years with $4k down.
Fix-up, needs a lot of drywall and flooring, windows, and some roof work. I haven’t seen the property up close, I’m going by what the seller told me. I can do most of this work myself and could probably get away with $10k fixing it.
The owner was carrying paper for the last owners and had to foreclose, they in exchange destroyed the house.

The value of the house fixed is about $85-$90k. The problem I have is, no cash, I mean none.
Put on your creative hats and help me folks. How can I do this with no money out of pocket. The only thing I have going for me is a low price and a flexible seller who is offering seller financing out of the gate. He may be receptive to even more flexibility, but try as I might I can’t think of how this can work.
I had some thoughts-

  1. Ask seller to go 100% or defer the down in exchange for raising the interest rate. But I would still need fix-up money. The higher rate wouldn’t hurt me because I plan to fix and sell.

  2. Create a second mortgage and sell it at discount, giving the seller his down, me some fix up money and maybe some extra mortgage payments in the bank. Could I sell a second though?

  3. Retail flip- Put under contract with seller contingent upon me finding a buyer, quick fix what has to be fixed($5k or so) for it to be livable and my buyer pays $15k down and the seller carrys him. I get 15k minus 4k down to seller minus fix-up costs. I might clear a few thousand here.

3)???

I may be way off here, these are just brainstorms.

Any advice would be much appreciated.

Bryan(AZ)

3

One thought - Posted by Earnest

Posted by Earnest on April 01, 2001 at 22:54:59:

First, you guessing how much it will require to fix it. Given how tight money is for you, you’d need much better information before you do anything. I have a friend who does my fixup work; knows costs, what’s requried in time, does good work, on time, etc. Remember fixup takes time. Many–MANY-- repair people low bid thier work and take 2, 3, 4 times as long doing it as they first indicate. How long can you make montlhy payments luntil the work is sone? Unitl the work is finished at the holoidays? Then you can wait another 3 or 4 months until the holidays are over and buyers are looking again? Lots to consider.

Can you live in it for a while? You may qualify for an FHA loan. Some government assisted loans, depending on how its structured, will only require you to live there for one year; other’s require 2 years.

FHA’s require only 3%–just under $1500 in this case-- and you can roll nealy all other loan expencses into the loan.

Don’t lie to Uncle Sam; that would be fraud. But if you have the 3% and willing to live in it for a while, this could work for you.