Those days NOT over ....here - Posted by Thank you all !!!

Posted by louis on July 14, 2001 at 16:25:41:

plumbing and electrical are my specialties at my full time job plus i have a fully stocked wharehouse of supplies ,wate lines ,waste lines,faucets,toilets,tubs,ect.
with the exeption of the painters the rehab will be virtually free

Those days NOT over …here - Posted by Thank you all !!!

Posted by Thank you all !!! on July 13, 2001 at 23:08:25:

Last week my post was about how a realtor atempted to discourage me,and i got alot of postive feed back and reasurance from this forum and i would like to thank you all
you guys and gals are truly the best!!!
I found a fsbo house ! a 1940s 12 bedroom mansion in need of alot of cosmetic work as well as some plumbing and electrical the owner will not budge from his price of 340,000 and the comps i did say 4 houses around the same size sold for between 460,000-500,000 all of them are within sight of the front porch of the house i want.
well with my salary (57k)and the work this home needs i know i won’t get a loan hard or soft.
so here’s what i did,
i offered the owner a partnership since he has’nt been able to sell the house i told him i would do the work on the house and even pay for materials and labor when the house was done we would both sell the house and i would take anything over his 340,000 for my efforts i expect the house to sell between 400,000 and 500,000
my only problem is how or where can i get contracts to make this deal legal ?
let me know what you think of this deal
thanks again
Louis

How about this? - Posted by J. CA

Posted by J. CA on July 14, 2001 at 13:12:58:

Tell the seller: “Ok, ok, you’ve got me! I’ll pay you your full asking price at $1,889/month for 180 months, starting in 6-12 months so that I have time to fix the place up before I have to start paying, if I walk away you keep the fixed up house.”

Then find someone who will fix the house in exchange for a down payment and either: 1) pay you more per month than you’re paying the seller, 2) buy your option/contract from you for X dollars, 3) split the difference between the fixed-up FMV and the $340k purchase price when they finance.

Re: Those days NOT over …here - Posted by JD

Posted by JD on July 14, 2001 at 11:01:01:

too many things can go wrong here. what happens if there is a fire? How are you going to control what he sells it for? What’s to stop him from selling it for $341K after you put $20k into it? Way too complex and risky. I would never do this.

Re: Those days NOT over …here - Posted by SCook85

Posted by SCook85 on July 14, 2001 at 09:50:29:

I have never used a performance mortgage in the past but I believe this is a perfect place to use one.

If all you have is an agreement to sell the home and give the seller $340k once sold, the seller can sell without your knowledge and take everything. If you have a performance mortgage in place you will have to be contacted by the company doing the settlement for a pay off. No one will be able to right a title insurance policy on the home without first satisfying your mortgage.

As far as the deal goes- you are being creative and you are making things happen- I applaud you for this. I would only be concerned about one thing. Big old homes like this that need plumbing, electrical, and a lot of cosmetic work cost a lot of money to fix. If I remember correctly on your first post you said that you had no money. You aren’t going to get away with fixing this home out of your weekly paycheck. It could take a couple of years at that pace. Have you addressed this part of the deal?

Steve

Re: Those days NOT over …here - Posted by jimi

Posted by jimi on July 14, 2001 at 07:57:09:

I would secure your agreement with a recorded option.
In your example, the “strike price” of the option would be $340k. You’ll need to negotiate the length of the option, or “term”. I’d ask for a one year option with at least a one renewal year.

Re: Those days NOT over …here - Posted by SueC

Posted by SueC on July 14, 2001 at 07:32:40:

Michael is absolutely right - this is not a cookie-cutter type deal, and you will get burned if you do not have the right legal setup. A lawyer should cost under $5K, which considering the profit is a small price to pay to protect yoruself from the potential problems.

Re: Those days NOT over …here - Posted by Michael

Posted by Michael on July 14, 2001 at 02:08:18:

I would look for a good real estate attorney and explain to him what you want to do and he should be able to write you up he proper contract you need. It will be a small price to pay to secure your position!

Michael, KY.

Re: Those days NOT over …here - Posted by Michael

Posted by Michael on July 14, 2001 at 02:07:51:

I would look for a good real estate attorney and explain to him what you want to do and he should be able to write you up he proper contract you need. It will be a small price to pay to secure your position!

Micahael, KY.