Need some advice RE: my personal home.... - Posted by Charity

Posted by phil fernandez on November 27, 2000 at 17:22:48:


Your scenerio will absolutely not work assuming the seller will have to sell the $20,000 2nd. No way will the 2nd be only discounted to $15,000 and sold for that, for cash to the seller.

Let’s look at this deal.

Sale price = $230,000
Assume 1st = $210,000
seller 2nd = $ 20,000

First off the 1st mortgage LTV is 91%. Note buyers probably aren’t going to do more than 80% LTV.

With the $20,000 2nd, the LTV is at 100%. The buyer has nothing invested in this deal and he can walk if a cold front comes through. In my opinion the $20,000 2nd has a value of about zero. Of course job history, credit, income and other factors do come into play, but I still can not see a note buyer even biting on this one due to the 100% LTV.

Need some advice RE: my personal home… - Posted by Charity

Posted by Charity on November 27, 2000 at 12:31:35:

We bought our home just over a year ago when our lives were simpler. Because we adopted a baby and then got pregnant, my work ability has changed. We really need to sell our home, so I (being a Realtor) put it in the MLS about a month ago and we’ve reduced it to market value (a little below actually). We’ve also advertised for Lease Purchase with $15K down and $1995 a month (home is worth about $250K). I am getting no bites at all. The home is in a n’hood with $200-$700K homes in a desirable area. What can I do to either get it sold fast or L/P? We need $10-15K up front to make it worthwhile…

Help guys and gals!!


Re: Need some advice RE: my personal home… - Posted by Rob MacFarland

Posted by Rob MacFarland on November 27, 2000 at 13:17:10:

“Creative Real Estate” … ie. be creative!
You may be able to offer your home for NOTHING down, or only $1000 or so …
~Is your mortgage assumable?
~could you carry a second that you could then sell for the cash?

$250,000 Value - you know from being in Real Estate
$230,000 your “low” asking price
$210,000 assumable mortgage = NO Money down from Mr. buyer needed here!
$20,000 second mortgage which YOU carry = also NO Money down for Mr. buyer but which you then sell to an investor in discount mortgages for $15,000+ in cash for YOU!

Take this to the FINANCING FORUM and get some EXPERTS to run from here … just a rookie with his opinion here :slight_smile:
Good Luck.
Maj Mac

Re: Need some advice RE: my personal home… - Posted by WilliamGA

Posted by WilliamGA on November 27, 2000 at 13:14:06:


If I remember correctly, you are in Atlanta. I am just south of you in Macon. I know that here it is very slow for sales right now. I am holding 3 properties and have just bought 2 more. 2 of the ones I have now, I have been holding for 2 months where normally I have them gone within 2 weeks. Just that time of year I suppose. From what I gather from other posts, it is slow for everyone right now as well.

Good Luck!


Re: Need some advice RE: my personal home… - Posted by Bo (GA)

Posted by Bo (GA) on November 27, 2000 at 13:09:23:

A couple of points that may help you:

  1. Most people who have $15k to put down will be able to qualify for a conventional mortgage. The remainder are going to be the cash rich - credit poor type, and their numbers are going to be limited. This is why I think you are not getting any replies to your ad.

  2. I have found that instead of advertising the down payment you want, write “small down payment” instead. When they ask how much, reply with “How much can you afford?”. Go from there and maybe offer the difference on a short term note.

  3. Having done several lease purchases, I have found that when the lease payments start approaching $2k/month, the number of prospective t/bs dwindle significantly. Therefore, if a property I have been lease/selling becomes vacant and has appreciated to more than $180k, I sell it and buy a cheaper property to lease/sell instead.

  4. Instead of a lease/sell, maybe you could try a wrapped mortgage instead. This would give the t/b the possibility to deduct the interest portion of the monthly payments on his/her taxes, and would reduce the net monthly cost to him/her. Example: Lets assume that you structure a mortgage where the mortgaged amount is $200k (after $15k down), interest 10% and done over 30 years. You end up with a P+I payment of $1,755/mo. Assume $240/mo for escrow and you have your $1,995/mo payment. Of the $1,755/mo, $1,667/mo is deductible interest for the t/b, and with a 30% tax rate, the monhly payment can be reduced by $500/mo. Which means they are still paying you $1,995/mo but with the tax break it is only costing them $1,495/mo. Advertise saying monthly payment $1,495/mo net (net is the key), and you will have quite a few people who want to live in a $215k house for $1,495/mo!

Disclaimer 1: The above numbers are just a quick example, and may not reflect your actual situation.

Disclaimer 2: If my math does not add up, it is because I left my mortgage calculator at home, but I am sure you understand the principle behind them.

Good luck!

Bo (GA)