Investor flipping contract to me, need advice - Posted by breeeves

Posted by Bud Branstetter on November 30, 1998 at 14:23:32:

From the sellers standpoint he is getting 3K now, 6600 during the next year and his 50K at the end of a year. If you don’t buy he keeps your money and and gets the property back. Ready to do it again. He gets FMV cash.

From your viewpoint you should get 3K as part of a L/O. An additional 80/mox 12mo leaves 1K at risk. Of course you play landlord and have to be sure to attract a qualifiable tenant/buyer. One year is not much room to find a back up. If you have nothing at risk 1 year is possible. On an owner financed deal with money and credit at risk the one year balloon is an alligator with his jaws wide open and your asset exposed.

Investor flipping contract to me, need advice - Posted by breeeves

Posted by breeeves on November 29, 1998 at 09:45:51:

Got a call today from another investor who purchased a SFH with owner financing. He is selling his rental properties to buy a motel.

FMV 62k
No major repairs
Current financing in place - He bought for 62k w/ 3k dwn and all pymts of 550/mo going toward principle. Ballon of 50k in Jan 2000. No due on sale.

Currently rented - 630/mo

He wants 5k for contract. I’m trying to formulate my back door if I offer him 3k for the contract and hold till Jan 2000. How can I pull the equity of approx. 10k out at that point? I would not want to be in the position of having sell the property to make the ballon pymt nor qualify for a new loan. LTV would only be 81% at ballon date.

I would not want to keep as rental. Just trying to figure how to profit without longterm ownership.