I have a cluster of houses on one street. have rehabbed some of them. the rest have tenants, and I’ll get to them whn they turn over. another investor has props on same street. he wanted to make a deal for 2-3-4-5-6 of the houses. so we did.
he took 5 of the houses under a lease-option arrangement. he has a triple-net lease over the 5, with all costs of ownership. he also has an option to buy the 5 houses for a price we negotiated–and 2 years to exercise. his plan is to rehab/bump rents and then take the finished-5 to his banker for a take-out loan.
I had more projects going than I really wanted and was very willing to deal some.
and yes, in case anyone wonders, these are in TX. and the deal easily side-steps the L-O rules enacted in 2006.
that’s the essence of the deal. there are finer points, if you are interested. just ask!
Not exactly Ed, but I’ll give it a shot - Posted by Jimmy
Posted by Jimmy on September 28, 2008 at 05:39:36:
I ain’t smart enough to understand the macroeconomic implications of the situation or the “solution” worked out by Congress. I wonder what Alan Greenspan thinks? he has been strangely silent this week. I tend to like his judgment and opinion.
but I AM smart enough to understand, see and feel the micro-implications. i.e., where the rubber meets the road.
bank money is available, but its tighter than I have ever seen it. my experience with banks only goes back to the mid-80’s, so some old-timers may have seen tighter situations. spoke with my banker last week. he can help me if I have a good deal.
there are NO cash buyers out there looking for lower-tier houses, at least not in East TX. none. zippo. zilch. nada. the financing is gone, because most of these folks would have compromised/average-at-best credit.
plenty of people looking for seller-financing. ah ha! there’s a nice way to make money. If I am the only lender in town, I can name my terms.
plenty of other rehabbers who are squeezed, and cannot finance deals. another opportunity. just closed a lease-option Friday, where I off-loaded 5 rehab houses to another guy.
if you are one of the ones who can still get money, then use this to your advantage. be the bank!