Posted by JohnBoy on November 19, 2001 at 16:13:19:
principle, interest, taxes and insurance
Help ASAP, Johnboy & others - Posted by DannyFL
Posted by DannyFL on November 18, 2001 at 17:20:49:
I have come across an excellent property.
$105,000 sellers wants All cash this the only way he will sell at this price.
Market value $125-129,000 in great shape have seen inside and out. sellers lives TX house is in FL.
Now I know there is money to be made here.
This will be my first deal ever. My credit is shot,no cash I mean none, I moved here not to long ago can not get a job.
I know I could tie up the property for atleast 30 days but finding a buyer that can qualify and loan be done in time is another thing.
What can I do?, Other than bring in a partner?
Thanks for any help Danny
Tie it up, then SELL it fast (10 steps) - Posted by Michael Morrongiello
Posted by Michael Morrongiello on November 19, 2001 at 14:23:05:
Danny:
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If your figures are accurate, then as suggested TIE UP this house for as long as you can (option, agreement, letter of intent, etc.)and preferably 60-90 days…
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Now, market the heck out of this home by offering it for sale to prospective buyer with an Ad that might ring like this;
$6,500.00 Down, $1,076.00 per month
Owner will Finance
No Bank qualifying (means NO traditional bank qual.)
Lovely 3/2, … Call Danny today!
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When the phone rings, you’re being paid to screen the callers and weed out the deadbeats…Your goal is to have an interested buyer come along who intends to move into the home as their primary dwelling and has the cash to put down, has reasonable & stable employment, has an acceptable credit profile, and credit scores in the 600 or better range…
NOTE: out of 20 callers, perhaps 3-4 will fit this profile -
Now, what will happen is that your property seller will SELL DIRECTLY to these buyers at the $129K sales price. They will put down their $6,500.00, leaving a balance of $122,500.00. This balance will be OWNER FINANCED by the property owner in the form of a purchase money 1st lien mortgage & Note.
Suggested terms (these can vary); $122,500.00 @ 10%$ amortized over 360 months, No balloon, No prepayment penalty, No points, No application fee, NO other lender junk fees, etc. (for warehouse fees, document prep, origination fees, tax service fees, PMI premiums, prepaid escrows, etc.)- the monthly installment will be $1,075.03 P & I (hence the $1,076.00 in your AD).
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At closing the property seller (Not you) will then SELL their newly created $122,550.00 purchase money 1st lien mortgage to a Note investment firm or funder (we purchase such paper) so that a LUMP SUM cash payout can take place.
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Ideally, A typical funding amount of around $112,500.00 +/- cash can be provided by the Note Investor for this $122,550.00 “PROPERLY SETUP AND STRUCTURED SELLER FINANCED NOTE” (this is approx. 92% of the balance due).
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Now, from these funds the property seller gets their $105,00.00 cash that they evidently want.
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You make a decent fee for putting together and orchestrating this transaction and for your time invested in procurring the buyer, gathering paperwork, and coordinating the sale.
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The seller has gotten the cash they wanted. You earned a profit. The buyer has purchased a property they wanted and with you providing them a “turn key” solution to getting them financed as well and.
The Note Investor has acquired a properly setup, documented, and screened, 1st lien mortgage that they can be comfortable with.
- A sale has happen and there is a win-win atomoshpere or synergy that prevailed.
Can all of this happen? SURE
Happy Hunting.
To your success,
Michael Morrongiello
Re: Help ASAP, Johnboy & others - Posted by JohnBoy
Posted by JohnBoy on November 19, 2001 at 12:32:43:
How do you know the house is worth $125k - $129k?
Going by the lower amount you don’t have enough room in this to justify you paying cash or getting a loan in your name. You need to be at 80% of the property’s value after deducting all costs involved to justify that. That’s also assuming the property is in tip top condition and needs nothing done to it before moving in! Otherwise you need to deduct that cost as well.
30 days is not enough time. You need at least 60 days to find someone and get them approved for financing to close within 60 days.
The only way I would think about doing anything with this is by just getting an option on it for 60 - 90 days and then market it to find a buyer. Then assign your option to them for a fee and let them close on it for the purchase amount.
Ask yourself this. If this was such a great deal at $105k then why hasn’t the seller been able to sell it yet???
How long has it been up for sale?
Did they have it listed with a realtor? If so, at what price? For how long?
Why is he selling?
WHY does he need all cash?
How much does he owe on it?
Lets assume it’s worth the $125k? If he lists with a realtor he will have to make payments on it until someone buys it. That could take up to 6 months! If his payments are about $1k PITI, then that’s $6k out of his pocket over the next 6 months.
Then he will end up having to take an offer for less because no one will offer the asking price. So lets say he will end up having to accept an offer of $122k to get it sold.
Then he’ll have 6% for the realtors commission. $122k x 6% = $7,320
Figure at least $2k for his closing costs.
So that’s,
$6k payments
$7,320 realtor
$2k closing costs
$15,320 total
$122k - $15,320 = $106,680!
And he can’t seem to get $105k now! Where’s the deal? What he’s offering is to sell for what he would walk away with if he listed the property with a realtor and had to sit on it until a retail buyer comes along!
If it’s really worth $125k and it will appraise for that, I would offer about $75k CASH! Then use a hard money lender to fund the deal. If they want CASH, then that requires a STEEP discount! Otherwise, your price, MY TERMS!
But what you don’t tell us is WHY he needs cash? WHY he needs $105k? What he owes? Why is he selling? How FAST does he need to sell? WHY?
What will he do if he doesn’t sell it? Keep it? Rent it out? Live in it forever until it sells? End up letting it go to foreclosure? Is he current on the payments or behind?
Once you figure out the reason he NEEDS to sell and what exactly his PROBLEM is, THEN you can figure a solution that will SOLVE HIS PROBLEM!
They ALWAYS want CASH! The question is, what does he really NEED???
Re: Help ASAP, Johnboy & others - Posted by wil(socal)
Posted by wil(socal) on November 19, 2001 at 14:32:25:
I am a newbie so I don’t know a lot of terms. If you don’t mind me asking…what’s a PITI?