L/O Pro's- Please Advise!! - Posted by Brian M. Powers(MI)

Posted by Brian M. Powers(MI) on June 30, 2001 at 09:04:06:

I told him right off the bat that I could not give him any cash. Thats why he suggested he re-fi as a way to get his cash. What do I care if he owes $40K or $120K, right?


L/O Pro’s- Please Advise!! - Posted by Brian M. Powers(MI)

Posted by Brian M. Powers(MI) on June 29, 2001 at 22:38:53:

A seller called me the other day in response to the letter I sent him when I pulled his prop from the expired MLS listings. I pitched the L/O idea to him and he sounded very interested and wanted me to come out and see the prop and “show him how it works”.

After today, he remains strongly interested…and now here is the BUT…

The house is worth about $150-$155K and I could get it from him for $140K I’m quite certain. He only owes $40K! Obviuosly he is worried about his substantial equity position and wants some cash now…not all, but some. He suggested to me that he could re-fi the prop (not a 100% re-fi) to pull some of his cash out, then L/O it to me.

It sounds fine with me but I am a newbie so give me your thoughts please!!


what about… - Posted by toddW(CO)

Posted by toddW(CO) on June 30, 2001 at 23:39:21:

He seems motivated as well as creative. If he is willing to refi, why not ask him to refi the entire amount of purchase price $140k,(or close to it, in which case he would hold a second) and sell to you with a wrap. Doesn’t mean you couldn’t lease option it to someone else for $155-160k. Dont just focus on one way of obtaining the property, BE CREATIVE, thats what this is all about.
just my thought…
Todd Williamson

Re: L/O Pro’s- Please Advise!! - Posted by Matt B

Posted by Matt B on June 30, 2001 at 08:50:54:

That’s probably what I would have suggested. I never put any money into the deal. However, before I suggest that he go refinance, I would make sure that he actually NEEDS some cash right now. If he can wait about a year, then I would tell him to just put it on hold. It might not work, but I would start there.

As far as the time before you have to make a payment, I always offer 3 months initially before I have to make a payment. I then work my way down to 2 months. 30 days isn’t good enough for me.

Re: L/O Pro’s- Please Advise!! - Posted by Kevin Subbert

Posted by Kevin Subbert on June 29, 2001 at 23:07:21:

The terms sound good, but the price leaves little to be desired. Buying a 150K house for 140K isnt a great deal, but you are getting good terms I presume. Are you getting in 0 down? What are your monthly payments going to be? See if he will give you some time to find a tenant. 60 days is optimal but 30 is OK. If he re-fi’s he wont have a payment for at least that long.

Its certainly do-able. Good luck.

Kevin Subbert