Posted by tang-0-rang(CO) on March 13, 2000 at 09:29:25:
A “Wraparound” Mortgage (All Inclusive Trust Deed), is a new mortage which leterally “wraps” around the old mortgage. By using a wrap, the buyer makes parments on a new mortgage(seller financing) to the seller or title company, and the seller continues to make payments on the old mortgage.
cordially
Todd Williamson
Help! New to this and already have first deal in the works! - Posted by Jeff
Posted by Jeff on March 11, 2000 at 20:23:32:
Please help. My wife and I were discussing getting into this business and a deal just fell into our laps. We are very new at this and need some sound advice.
Here is the deal.
Indianapolis downtown historic district. We find out that a gentleman is looking to get out from under a house he just inherited. It’s more then he can deal with and he took out a loan for $40,000 that now he can’t afford. The house is pretty run down and would need a lot of work to get it right. maybe $30,000 or $40,00. The thing is, this is one of the last houses in this area that isn’t finnished. If the market for this area was any hotter the houses themselves would combust! One and two bedroom single story shotguns have been selling for $125!!! This is an 1850 sq ft two story!!! It would, if done right, go for at least $120 or more.
The house was just appraised, by a very conservitve inspector, in January. $42,000. I’m sorry, but I don’t think this guy has firm grasp on the market in this area. The seller doesn’t care about making any money. He just wants the bank off his back. The loan is not assumable and I couldn’t get a bank loan even if it was. BUT, the seller is open to a Lease Option.
We are looking at turning it around and doing a lease option to a buyer who is looking for just this type of fixer upper. They have money, and the skills, just no the credit! We’ll pocket a couple thousand on the deposit and $120 a month!!!
I’ve went straight to the book store and found a couple of books that talk about lease option. We bought Ron LeGrande’s. But here is the real stickler. These books talk about a lot of great concepts, but what I need is a paint buy numbers kit!!!
Where can I find contracts?
How do lock this guy in to me? I want to make sure that I’m the only one he can deal with. I know it sounds teritorial. But if I can get this deal to fly it will really give me the incentive I need to go out there and really go for it!!!
Any and ALL advice is not only welcome but begged for.
Thank you
Jeff and Amanda
all inclusive trust deed - Posted by tang-0-rang
Posted by tang-0-rang on March 12, 2000 at 14:15:09:
If he is trying to get out from under the property why not ask him to give you a “wrap” (all inclusive trust deed). And then you could leas option it to someone else.
just a thought
Todd Williamson(CO)
Re: Help! New to this and already have first deal in the works! - Posted by Troy M
Posted by Troy M on March 12, 2000 at 09:36:46:
Jeff,
I’ll be interested to see what others say, but I personally would not do a sandwich lease/option on a major rehab like you describe. IMHO, you need to get a real handle on the figures. 30 OR 40k for fix up? That’s a pretty large number and a large differential, makes me think you may not really know the true fix-up cost? But, if you are relatively sure of your numbers, TIE IT UP. That means get a real purchase agreement signed off, leave yourself an out, such as an inspection clause, then flip it. Hard money is an option that may work for you as well, though I would not get the hard money for yourself, but get it lined up for your buyer. You said :
We are looking at turning it around and doing a lease option to a buyer who is looking for just this type of fixer upper. They have money, and the skills, just no the credit! We’ll pocket a couple thousand on the deposit and $120 a month!!!
Do you already have such a buyer? If so, find them some hard money and flip it. Or, find another buyer who has the credit/cash to do a rehab like this.
Just a thought,
Troy M
Re: Help! New to this and already have first deal in the works! - Posted by chris
Posted by chris on March 11, 2000 at 23:58:14:
Check Bronchick’s Lease/Option material for sale and free articles to read on this site.