have the sheets coarse but need help - Posted by trevor

import · January 13, 2000, 10:19pm

Posted by Stephen Simpson on January 14, 2000 at 22:39:56:

Great post from Jim on the lease options. Also look for owner finance deals. Im in the middle of one now. The seller of the 6 unit property wants 210,000 (appraised value)(50,000 down and he will finance the rest at 8%) well im certainly not going to give him 50K and his asking price. So im offering 180,000 and am going to finance 190,000. (10,000 here to pay my closing costs and Ill get around 5k back at closing)I have structured the deal so the bank will loan 60% (on a 20 year note)(you wont have much trouble getting a 60% loan at the bank) and the seller will take a second for the other 40% (5 year balloon, 8% interest, 20 year amortization. The seller told me (if you can beleive that a person would do this)that he has people call him and say they are students of no down payment courses and want to make a deal “he hangs up on them” but he sure likes me, and has to give me 10k at closing. Its all the way you present yourself. Now this deal is not done but I do have several that have gone down just like this. By the way I will make $700 a month on the project positive and make 20K equity. Great deals to you. Just another way of doing it.

import · January 13, 2000, 10:19pm

Posted by trevor on January 13, 2000 at 23:19:22:

I just started the coarse, I have listened to have of the tapes so far and taken notes. My question is, how do I go out a buy a house with no money down, when I have poor credit, and no money in savings. Carelton likes to make you think you can do this right after you purchase his coarse, even if you are broke and have bad credit.
So what is the plain answer, something carelton does not come right out and say.
What exactly is a assumable mortgage and how does it benifit the buyer.
How exactly does lease option to buy work. What happens at the end of the lease. Do you have to finice through a bank at that time, if you have to finice at a bank at that time, why would’nt you do it at the time of the first offer.

import · January 13, 2000, 10:58pm

Re: have the sheets coarse but need help - Posted by Jim Holmes

Posted by Jim Holmes on January 13, 2000 at 23:58:17:

Trevor,

I had some equity in my live-in duplex and bought properties using it, immediately after reading and studying the course. Then my cash dried up and I had to get creative. In some ways having some cash was a handicap, because now, a year later I’ve become wiser and more creative…because I have less down payment from time to time.

A good way to start would be to drive neighborhoods and talk to some FSBOs. A better way is to advertise, "I buy houses (Your phone number). Your phone will ring off the hook. Then you can sort through the deals to find someone who will lease option their home, no money down.

An assumable mortgage is one that usually, for a small fee, you can take over the payments. The owner usually wants cash, but some will carry back a note for the balance with little or no cash. A big advantage to this is less financing charges and if you are lucky, the loan has been paid on so that the balance of the assumable is paying a larger amount of money to the principal amount, building equity for you quicker.

A lease option is a deal where the buyer can “rent to own.” With a down payment as little as nothing, each payment has a portion going toward purchase. An example would be $200.00 of a rent payment going toward purchase, so after 36 months, when you exercise the option, you have 200 x 36= $7200.00 down. The cool part of this is that at closing that $7200.00 becomes your 10% down payment for a conventional loan. If your house was priced at $68,000.00, it is possible that you could get money back at closing. If you sublease/option, your tenant could be making your payments and building credit for you…this is a great no money down deal. Add in the fact that your house has appreciated over the three years at 5% interest (now worth $78,400.00) have greater equity! You just made $78,400.00 - $63,200.00 = $15,200.00!!!

$63,200.00 = $68,000.00 - $4800 credit. I hope you can see now why lease options are so amazing. On your standard bank loan they would like you to have a down payment and then with your payments and interest your equity build up would be no where near the % you get from the option credit.

I hope this helps.

Jim from Idaho