Re: Jim, walk me through here … - Posted by Redline
Posted by Redline on January 13, 1999 at 14:25:46:
Carey,
Subject to in a trust means that you will in affect be assuming a non-assumable loan. The loan this guy has probably says you cannot just take over the loan and make the payments. Buying subject to and using a trust get’s you around this little problem. (See "How to beat the Due On Sale Clause parts I and II by Bill Bronchick in the How-To Articles).
So, have the guy transfer title into a trust and then transfer beneficiary interest to you. (Net affect: you have purchased the property). Now, transfer this position to someone else and walk away (and you still have your $10k escrow coming to you).
Someone would take your position here if that someone could not/did not want to get a loan themselves and they wanted to live here. This would be an EASY way for someone to live in a nice house with little money down and not alot of hassle.
Here’s the bottom line. The loan is $84K according to the post. Regardless of what market value you manage to come up with (we were given $79K)…even $85K…there is no equity here…and therefore no real reason to hold this property. Holding=risk.
Assigning this deal gives you $10K plus the assignment fee. What else do think you’re going to make without taking on a risk that is at least equal to it??
What note are you going to rehab?? How does that enter into this deal?? You’re going to pay off a note that essentially at least equals market value?? You think this will increase your yield??
Guess I’m just not seeing your point of view, any other options particularly worth persuing, or why Carey(a complete newbie) should persue any of this other than a straight forward assignment.
Again, buying notes with the $10K or doing anything else with the $10K to me would represent a separate transaction.
My line of thinking was that the property has probably
been paid on a while. If that was the case then you could raise the interest rate a couple of points so the underlying pays down faster. I ran an amort. and your right, with just two points added and if the loans started at the same time it only creates about a 1k spread in three years. Not worth it.
But, I do still have a question. How much profit DO YOU like to see before you will stay in the deal for the backend.
general feelings on retail flipping? - Posted by Ray Richardson
Posted by Ray Richardson on January 14, 1999 at 12:00:18:
A general question regarding this sort of deal- Is it the opinion of the veterans out there that it is almost always pretty easy to find a retail buyer for a house offered at FMV with seller financing? I would like to add this sort of “retail flipping” to my tool box for dealing with sellers who need some cash, need something close to FMV, but are flexible on terms. Thanks,