Posted by Dwight Munson on October 20, 2000 at 21:17:41:
I agree with marty very doable-confirm FMV See JPs article on valutation on this site then as marty says work out the needs and desires so you all win. If you do not want to do it call me.
Dwight
“Subject to”…help!!! - Posted by Thomas
Posted by Thomas on October 20, 2000 at 19:46:29:
Hi everyone,
Sellar calls and has to get rid of her house. She bought it for a son getting married, but it didn’t happen. Now she’s stuck with a hefty mortgage and needs to sell. I explained the PacTrust idea and she liked the idea. She is willing to stay on the title and let me bring in a T/B. I’m a newbie and not really sure what to offer and how to structure it. The number are big also.
FMV=$430,000
PITI=$3,900
Loan Balance=$389,000
I would like to put it in the Trust, buy it for a little bit over the loan balance, make some cashflow, and sell it to T/B for close to FMV. The sellar just did some work on the house to make it marketable, so she wants recoup some of that cost. I would like to hear some opinions on “what to offer” and “how to structure a deal like this.”
Do you think I’m being to ambitious? After all, she called me.
Re: “Subject to”…help!!! - Posted by JPiper
Posted by JPiper on October 21, 2000 at 19:58:13:
I’m with Bob below. There is very little equity in this deal…and whether you can find a tenant/buyer to make a payment of this type is questionable. I would not enter into this deal unless I already had located a tenant/buyer…and then I would probably assign to him. Call me cautious.
JPiper
Re: “Subject to”…help!!! - Posted by Bob In Indy
Posted by Bob In Indy on October 21, 2000 at 19:18:51:
For a first time investor, you’re really taking a chance. For homes over $175,000 the standard 1% of purchase price = lease price starts to fall down. Also the appraisals seem to have a greater variance. Finally, the number of potential L/O prospects seems to deminish. You may be excited about the prospect of having a deal, buy my experience says that you might be better off optioning the property. If its a good deal you will still make money; if its not a good deal, you’re not on the hook for making lease payments.
I’m surprised that other investors haven’t given you the same advise.
I have to ask! - Posted by Bill Scott
Posted by Bill Scott on October 21, 2000 at 05:51:49:
Thomas–
Where in the heck do you live? I have to ask because when I see somebody looking at a SFR in the $400,000 range I start cringing. I’m in Ohio and in that price range I can pick up ten to twenty unit apt. complexes that would make me a lot more money. I know some parts of the country have higher prices (I’m originally from So-Cal) but this seems awfully high!
Just curious…
Re: “Subject to”…help!!! - Posted by Brent
Posted by Brent on October 20, 2000 at 23:32:17:
Just out of curiousity, how did she get your number? Ad in the paper? Bandit sign?
However she got it, it sounds like you’ve got a good deal on your hands.
Good luck.
Brent
Re: “Subject to”…help!!! - Posted by Marty Weisberg
Posted by Marty Weisberg on October 20, 2000 at 20:21:55:
Thomas,
I think the PACTrust is a great idea in this situation. The first thing I would do is find out what she NEEDS at closing. If you can structure the deal to give it to her then go ahead and do it. Then the question becomes…what does she want? You can structure the trust in such a manner to give her what she wants at the back end of the trust. That way you can find a RB (Resident Beneficiary) that can come in with not too much money out of pocket. You can put some in her pocket, some in yours and use some of it to set up the trust.
I’ll need more info about the mortgage payment, taxes, etc. before making specific recommendations on the monthly payments.
This deal is very doable. Let me know if you need help.
Good luck.
Marty