Great Deal - How to structure????? - Posted by Gary

Posted by Gary on January 03, 2004 at 07:13:33:

I have located a previous Landlord who is now a “don’t wanter”. He purchased two properties in 1985 and does not have the time or desire to maintain them. His goal is to payoff both properties and walk away after all closing cost with 45-50K. Seller will probably wait 60 days to receive equity. Both properties are in “excellent condition”.
My objective is a minimum of 20K after close with 20% equity remaining in each property. My FICO score are “excellent”; 740. No real estate agents involved.

Property A: Market Value: 62K
Existing mortgage: 25K
Assumable at ~8% with payments of 331.90

Property B: Market Value: 58K
Existing mortgage: 12K ( Note:I can payoff “ALL-CASH”
Assumable at ~8% with payments of 329.72

My solution: Get the Seller to accept a 60-90 promissory note for his equity needs. I payoff the 12K mortgage(Property B), obtain a 80% equity-line(on Property B)to pay myself back (12K+closing cost) plus 24K to payoff Property A (another 80% equity-line). If the properties sell within 60 days, I pay the Seller off. If not, I use the equity-line to pay him off.