Posted by frank on February 07, 2003 at 21:40:57:
How does it strike you that you could be divorced one year from now because the grand plan didn’t work? First: Get your inlaws to an attorney to draw your agreement. You stay out of it. Take my word. I’ve been there! A one year balloon on your loan is to short without an extension for lets say $2000. STUFF HAPPENS! Keep them happy and when this is all done and they are rolling it, they may want to bankroll
your next deal. Hope it works.
Big Al has a deal. Help! - Posted by Big Al
Posted by Big Al on February 07, 2003 at 19:42:23:
Here are the key aspects of the transaction.
- I am purchasing a house that was once on the market in E. Lansing, MI. The house is currently owned by my in-laws.
- The house has no mortgage (ie paid for). The only lien is for a 25K loan my in-laws took out some time ago for home improvements.
- I have discussed a purchase price with them of 172K with no downpayment. I project the market value after fixup to be 215K. They will personly hold the financing and receive monthly payment based on a one-year balloon. The payments will be based on a 30-year mortgage. The applicable interest rate is around 4.5-5% annual. Monthly payments based on this schedule is in the $800-900/month range.
- My plans are to fix the house up and have it sold long before the one-year balloon comes due.
- With the above said, I image that I need to organize a transaction that includes a purchase agreement, transfer of deed and recording of a mortgage interest for my in-laws.
Does anyone have an idea of the forms I need to complete this transaction. I know that I need a purchase agreement to present the offer. What do I need to document and file the mortgage terms and interest?
Any help would be appreciated.
Re: Big Al has a deal. Help! - Posted by Tim
Posted by Tim on February 08, 2003 at 07:23:24:
I don’t know your area, but is this deal too thin? If you could resell tomorrow for 215 you would have a 43,000 net, which sounds great. If it took the full 12 months at 800 a month your net is now 33,400, still pretty good, except you have tied up $9600 of your own in the deal. Last, but certainly not least, you say the 215 is after fixup, how much is that? If the deal after fix up costs is marginal it might be better to not risk screwing up a family relationship. If you go with this deal, definitely get an attorney.
Re: Big Al has a deal. Help! - Posted by JoeKaiser
Posted by JoeKaiser on February 08, 2003 at 24:29:50:
It makes no sense to try to document your deal when you have no idea what that entails.
We are talking about $172k, and you’re attempting to do this on your own? That’s crazy.
Go visit your attorney and have him do EVERYTHING. That way, it’s done right the first time and you have no worries about what should have been done or what you may have missed.
And by the way, deeds aren’t transferred. A deed is a conveyance doc. It conveys title, it isn’t title itself. Once recorded, you can tear it up and throw it away. It’s not like a car title.
Re: Big Al has a deal. Help! - Posted by Brad (CA)
Posted by Brad (CA) on February 07, 2003 at 21:05:12:
I just got W. Bronchicks ALt. RE Finance and just finished reading the first couple chapters.
A recorded mortgage seems to be a device used to secure a promissory note, which is not recorded. So you’ll need to have one of those in order to record a mortgage…if I’m right!?! (Any experienced investors what to correct me)