Posted by Bud Branstetter on December 10, 1998 at 10:33:05:
Because you may not have the resources to do all at once you get the option to do each house sucessively. The option is really on all the houses but you do one(or what you can handle) at a time.
Help!!! 10 homes for sale. - Posted by Kevin(OK)
Posted by Kevin(OK) on December 08, 1998 at 11:11:41:
A gentleman of 70 years of age called on my “I Buy Houses” ad, and said he has 10 houses he would like to sell. He had talked to his accountant and was concerned over the taxes he would owe, so I mentioned carrying the mortgages (all properties are free and clear). He said he would talk to his wife and get back to me. He did not give me the addresses of the properties, so I looked up the addresses and cruised by the properties (some are better than others, comps from $5,500 up to $51,000 with a total comp. value of $315,791). I called him up and told him I had taken the liberty of driving by the properties, and I am interested in buying the houses. He then asked “if I carry the mortgages, how much can you put down”? I asked “how much cash do you need”? He asked “can you put down $100,000”? I told him I could not put that much down, and I said that the amount I could put down will vary for each property (silently thinking: I might be able to do $500 per property). He then said that maybe he will just keep the houses for his children.
My plan is to send him paperwork showing him how much he and his family will make if he carries the mortgages for 30yrs @ 8.5%. I will also explain what would happen in the unlikely event that I defaulted on the mortgages. Should I mail this to him, or set an appointment to meet in person?
Is there another way of getting this deal done? Also, closing costs on this deal would be a killer. Can we do this deal without a title co.? Is selling a few of the mortgages an option? If I can pull this one off, I will probably be able to quit my job. Please help!!
Thanks
Kevin(OK)
Re: Help!!! 10 homes for sale. - Posted by Joe(IN)
Posted by Joe(IN) on December 10, 1998 at 07:35:22:
Try this on. . .
You could go and get 70% LTV mortgages on just three of those $50K properties. Seller carries notes for the rest and he has his $100K.
Do What Bud Says… - Posted by Marvin Seawood
Posted by Marvin Seawood on December 08, 1998 at 22:00:24:
and also read Bronchick’s “How to Raise Cash with
Subordination”. Then you’ll understand that if this
guy needs a hundred thousand to get the deal done,
you can give it to him.
Re: Help!!! 10 homes for sale. - Posted by Bud Branstetter
Posted by Bud Branstetter on December 08, 1998 at 12:09:38:
Kevin,
A response to can you put down 100k is ?if it is the right deal , yes. Is that the minimum amount of cash you have to have to make this work for you. You go on to find out if you can get him that 100K will he carry the balance a second lien. Heck, even I would loan 100K on 300K of value(for the right terms).
Most definitely set an appointment. Find out what he wants. At 70 he doesn?t want to play landlord. You on the other hand want to control the properties and make money on them. You will need to solve his problem when you determine what it is. Money for grandchildren to go to school, cash flow to live on, cash now to travel on, or buy that Cadillac, or even an estate to leave to his kids.
Closing costs can be deferred by a rolling option or lease option. Ultimately you will want to check title. Wait till you have a deal first. What kind of deal we don?t know yet. Find out the needs and wants then we can help on ideas for structuring.
Re: What is a rolling option? - Posted by Dennis
Posted by Dennis on December 09, 1998 at 20:06:34:
Sorry Bud, but what is a rolling option. I haven’t seen this
term on this site yet. Thanks