Posted by Ed Copp (OH) on February 17, 2001 at 13:30:45:
attempting to market the house at retail, to a good buyer. One would qualify for new financing. You might want to have a renter in the house to provide the money to pay the interest only payments. Then you would have 1 year to find the buyer (who might incidentally be the renter). Your out of pocket cost could end up being little or nothing.
You will make your money on the buy. If you buy right you will be O.K. Your profit is realized on the sell (that’s when you get a check). The interest only deal is like a real estate brokerage having a 1 year listing, only a little better. Good luck.
Straight Option or Otherwise? Need help! - Posted by Claude
Posted by Claude on February 15, 2001 at 21:50:09:
A co-worker approached me today about a property her mom owns that she no longer wants. She owns the property free and clear asking $40k with comps around $60k. My question is should I do a straight option on this and market it for sale before the option expires or purchase it conventionally then sale with owner financing. I found a lender who will do an 85-15-5 which reduces my out of pocket and prevents the mortgage insurance issue.
Re: Straight Option or Otherwise? Need help! - Posted by wannabe (NV)
Posted by wannabe (NV) on February 16, 2001 at 19:23:53:
What about an interest free loan! Offer monthly payments against priciple at whatever you can afford with a balloon due in 2 years. You never know until you ask! If you must pay interest, offer low interest like 3%. Just a thought from a rookie.
Re: Straight Option or Otherwise? Need help! - Posted by Ed Copp (OH)
Posted by Ed Copp (OH) on February 16, 2001 at 15:45:30:
First I would try to buy with owner financing as follows; Note to seller for $40,000 payable as follows interest only (monthly) with the balance payable in a lump sum in 1 year (or longer if you can get it). You get the deed now.
OR a straight option for as long as possible.
Be sure to figure in the financing and closing costs if you have to go out and find financing.
You might also consider making the seller a partner in the equity, because it might be cheaper than a commercial lender.
Thanks for your input! Another question for you. - Posted by Claude
Posted by Claude on February 17, 2001 at 10:56:39:
Let’s assume the owner accepts my offer to purchase with owner financing, 30 yr. ammortization, monthly interest only payments and balance due in 1 year . How would I finance the deal at the end of the 1 year term? Would it be a refi or a purchase since I now have the deed?