Posted by ZAC on June 26, 2001 at 14:07:46:
VERY SOUND ADVICE JOE. IM VERY NEW TO THA BIZ (IM AN EMBRYO)…BUT STILL IVE LEARNED THAT ONE OF THA DEADLIEST SINS IN THIS BUSINESS IS: PROCRASTINATION ! IT CAN AND WILL KILL YOUR BUSINESS. ONCE IM IN THE FLOW OF THINGS, I INTEND TO TREAT EVERY DEAL AS A “LIFE OR DEATH” SITUATION (CAUSE FOR SOME OF US…IT IS). THATS JUST ME. TOM CAN GET CRAZY PAID IF HE MAKES A MOVE NOW. HESITATE…AND HE’S SURE TO BLEED…A LOT. GO GET THAT MONEY, TOM!! ITS YOURS.
Once in a Lifetime Opportunity!! - Posted by Tom Mellinger
Posted by Tom Mellinger on June 25, 2001 at 08:59:32:
I’ve recently come upon a deal that could be a dream come true. An elderly lady is selling her house + 5 cottages on Lake Michigan. Her husband passed away last year, and it is too much for her to handle. She said the property is appraised at $670K, but she would be willing to go less if she can work out a deal without going through a broker. She is willing to work out a deal that she would finance with a buyer. I have gone through the CS course, but only completed a couple of small deals. I would like to do this deal with little or no money out of my pocket, but I don’t know if that is possible with so large a purchase price. Her cottages rent for $600/wk and are all booked though the summer and into the fall. She also rents quite a few of them through the winter. Based on fair market value, I could also easily rent the house for $1000-$1200 a week. Do any of you have any suggestions as to the best way to work out financing with the seller? She does not need a lot of cash, just the steady montly income. Would I be better served working out a lease-option or a contract for deed? If so, is it unusual to have a longer term, say 10 years, before the due on sale clause would kick in? Please respond with any comments as I am hoping to put together a deal within the next couple of weeks!
Thanks, Tom
Where on Lake Michigan? (nt) - Posted by Blane (MI)
Posted by Blane (MI) on June 27, 2001 at 06:58:55:
.
Tom, take a deep breath . . . - Posted by JoeKaiser
Posted by JoeKaiser on June 26, 2001 at 24:36:54:
. . . and go visit the seller. “Within the next couple weeks” thinking is a good way for a once in a lifetime deal to happen in someone else’s lifetime - not good. Go see her now.
It makes absolutely no sense to ask this board for suggestions about how to finance it. How would we know? GO ASK THE SELLER. Sit down with her and see just what she’s got in mind. While you’re there, she’ll have a chance to size you up and with any luck, in about twenty minutes, if she likes you, she’ll be the one trying to figure out a way to get you into the property.
Joe
Re: Once in a Lifetime Opportunity!! - Posted by Ray
Posted by Ray on June 25, 2001 at 13:40:56:
Tom, If the cash flow is there to support it (You didn’t say) I would offer her about $ 350K and have her take back a second mortgage for the balance of the purchase price. If the appraisial is $ 670K as you say, most any bank should loan you $400k if you have good credit and a reasonble financial statement. Pay her the $350 and keep $50k as operating capital. Remember, you are really buying a business. You will have to have staff, supplies, and all other expenses of running this type business. I suggest you take a hard look at the business’s tax returns. People have a habit of increasing expenses and reducing income on their tax returns, so you should be seeing, “worse case”. Good luck. Ray