Posted by Kathy (GA) on October 05, 2000 at 11:02:55:
Talk to me! Give me some ideas. I feel ignored here.
Newbie question on how to make this happen - Posted by Kathy (Ga.)
Posted by Kathy (Ga.) on October 04, 2000 at 20:14:25:
I have come across a townhouse that is FSOB. It is in a great rental area, with a college, mall, and highway close by. It is three bedrooms, with a possibility of a formal dining room becoming a bedroom. It has a N Q assumable mortgage from about 17 years ago. The payments on that part would be $525. The equity is about $30,000. I could do about $5,000 in cash, but not more, because I need some reserve to upgrade. Apparently they took out a second to get into a new home, and are unwilling to take payments. I am a new investor, I’ve completed a deal by LO. I have okay credit,but have not been employed the last two years, my husband has a good income. But, I don’t want to use his income for a basis of credit. Even if I had to pay a higher interest rate to finance the 25- 30 thousand, I figure my cash flow will be fine, because the rent can be about $850 for a three bedroom, and $950 for a four. I talked to one loan person so far, and he said he doesn’t know anyone that would do a second for a non-owner occupied. What are my options? Also, most of the properties are selling for about 86 - 89 thousand range, and I am talking $80,000. What are my options?
Re: Newbie question on how to make this happen - Posted by Michael
Posted by Michael on October 05, 2000 at 16:26:56:
Kathy,
I’m sorry that you feel ignored here. A lot of posts go unanswered because the poster didn’t ask the right question or include enough info. I am completely un-qualified to answer your question but if you provide some more info I’ll give it a shot.
What is the balance and interest rate on the first?
And the second?
What is the purchase price?
What are the comps?
I read your post a couple of times and assumed the following.
full market value(comps)= $86,000
purchase price=$80,000
1st= $50,000 @ 525/mo
2nd= $30,000
rent=$850/mo
w/ these numbers it does not look like you have a deal here unless you could arrange financing that was favorable to a buy and hold or a reduced price so that you could fix and sell at retail. On a buy and hold if you take your rent and subtract a vacancy/maint. factor of 30% that leaves only $595 remaining each month. when you than take out the first of $525 that leaves $70/mo to cover your second and association dues (assuming that there are any) W/ a new mtg @ 9.5% and 8,000 down your payment would only be about $600 and the payment on a 30k second at 10.5 would be $275 added to the $525 for the first that only leaves $50/mo to cover expenses. you could really get hurt here. Have you tried this on the financing forum? you may get a better response there. also try the note forum. Maybe your seller could create a note and sell it at closing to get his cash.
Hope this helps
Michael