Posted by Jim (FL) on August 05, 2008 at 21:40:34:
Ben,
This City lien is for not mowing grass, and overall having a junky exterior for 560+ days at $65 a day.
I know I will be able to get under 20% of the lien amount, but am not sure how far under, and dont want to leave any money on the table if I dont have to.
How to structure? - Posted by Jim (FL)
Posted by Jim (FL) on August 05, 2008 at 10:20:54:
I have a seller with a 43k first, and a 35k city lien on it. The property has an ARV of 140k. The seller wants 10k net.
I want to work with the city to eliminate the debt or settle for pennies on the dollar. I know that I can get them to come way down on the lien, but prior to that I have to bring the property up to code and go through an appeals process.
I need to tie the property up with the seller while I clean up the property and handle the appeals process, to see if we can make the numbers work on a wholesale deal.
I am caught between estimating what I can negotiate the lien down to, and signing a regular FL FARBAR contract with a purchase price that would reflect that, and of course adding the contingincies necessary. Or could I write an option that leaves the purchase price subject to what we negotiate the lien down to?
I know the FARBAR would be simple, but what if I completely eliminate the debt? THat would leave a lot more money on the table for the seller, and I wont see any of it.
Any suggesstions would be appreciated.
Re: How to structure? - Posted by ken in sc
Posted by ken in sc on August 06, 2008 at 07:13:36:
Your contract could be that the price is X, subject to you discouting the liens to Y. It could then say, if the liens are discounted to an amount lower than Y, the amount below Y will be split between the seller and you. In other words, your price will go down by half (50%) of that amount. Sounds fair, as you are doing all the work, but he still gets something with some good news on the discounting.
Re: How to structure? - Posted by Ben (NJ)
Posted by Ben (NJ) on August 05, 2008 at 19:02:24:
Hey Jim, good to see you still here. Just thinking aloud but what about taking assignment of the lien at a discount rather than paying it off. That way you are guaranteed the spread. Also, are you sure the city owns this and it wasn’t sold to a private tax lien holder. I know FL sells the liens just like NJ and lienholders here aren’t very willing to discount.
Re: How to structure? - Posted by Jim (FL)
Posted by Jim (FL) on August 06, 2008 at 07:51:56:
Great idea! I will do it this way with an addendum to the contract, and get it all signed today.
Wish me luck with the city!
Re: How to structure? - Posted by IB (NJ)
Posted by IB (NJ) on August 06, 2008 at 05:59:51:
Ben I think this is a different ‘Jim’ than the one who used to post here as ‘Jim FL’.
Ib