Posted by Need advice on July 20, 2001 at 17:43:13:
Thanks Ed, I appreciate your time and advice. We can carry the second if need be, but would rather not. What are my chances in carrying the second and selling it at a later time. Say, carry the second for $18,990 and sell it for less and still make some sort of profit?
Ed - Buyer has 14K to put into home - help - Posted by Need advice
Posted by Need advice on July 19, 2001 at 18:11:18:
I have a buyer that has 14K to put into a home I have for sale. Do you have any advice on how to get him in the home?
He has 85% financing.
His FICA is 539/540/584.
It is a flip in Plano Texas.
Appraisal at 192K.
Re: Ed - Buyer has 14K to put into home - help - Posted by Ed Garcia
Posted by Ed Garcia on July 20, 2001 at 10:17:15:
Need advice,
I think Nate hit the nail on the head with his post. The reason I say I think, is because we don’t know your circumstances? We don’t know if you need cash out of the deal, or if you’re in a position to carry a second getting a new first, or in the position to wrap the whole thing and carry it. The two foods for thought is that if you wrap it and carry the whole thing, you can write it at a higher rate and make a yield differential on your first mortgage therefore making more money in the deal. Chances are you will also have an underlying first mortgage at a lower rate in the event you have to take the property back.
However, if you sell it with a new first, and carry back a second, then you have an asset with no liability, allowing you to walk if you choose to, and making you look stronger financially when doing the next deal.
Ed Garcia
Re: Ed - Buyer has 14K to put into home - help - Posted by Nate(DC)
Posted by Nate(DC) on July 19, 2001 at 21:20:19:
If he has 85% financing on a 192K home that’s $163,200. Add his $14K and that’s $177,200. Leaving a deficit of $14,800 plus closing costs.
The $14,800 has to come from somewhere. Either the guy has to get a second from somewhere, or YOU have to carry back a second for him.
How large is your profit on the deal? If it’s large enough, you could carry the 2nd for him and be done with it.
Does the guy not qualify for FHA? If he has been fairly clean for the past 12 months he should be able to go FHA, and scores do not matter for that.
Frankly with those scores I think 85% financing is about the best he’ll be able to get. He might be able to get 90% somewhere but certainly no higher than that, unless he can go FHA.
My $.02
NT