What Next? - Posted by Josh MA

Posted by Ed Copp (OH) on February 24, 2001 at 11:44:26:

All the numbers and stuff that you posted about the loan are pretty useless, and have little to do with the deal.

First the property is listed with a Realtor, and the seller could very likely be obligating himself to a commission by selling the property to you during the term of the listing. This is his problem not yours.

Next you indicate that you two are agreeing by e-mail which is O.k. but I doubt that it is enforcable. You need a written contract on paper with real signatures.

It sounds to me very much like both the buyer and the seller are broke as church mice, is this the case? Some points that will need to be addresses when assuming this FHA loan are; are the payments up to date? If not they will have to be brought current. The seller wants a fee of $565 this is probably for the FHA loan assumption package and fee. This is usually in the vicinity of 1% of the original loan. Mostly it is used to check the credit of the buyer. If you the new buyer do not qualify, then the loan assumption will not be allowed, and the fee will not be refunded.
It sounds like you do not have the $565, if this is the case you probably need to wait or get some help on this deal.

There are a lot of other ways to control this property. One would be with an option, or a lease and option. Where you take control of the property and have the right to buy it later on (after you find a buyer).

Another would be to purchase “subject to” the existing loan, giving the seller a mortgage for his equity.

Another would be to purchase on a land contract from the seller. Be careful that he is not in financial trouble here, you need to know if there are other leins or judgements against the property or the person. Is he about to go bankrupt or get divorced?

There is probably a workable deal here but I really do not have sufficient info to be sure.

What Next? - Posted by Josh MA

Posted by Josh MA on February 24, 2001 at 09:10:03:

Original Loan:
FHA Loan (assumable with qualification)
Loan Amount $48,578 for 15 years @ 8.5% originated on 11/4/91
Interest Rate - 8.5 %
Term: 15 years
Origination Date: 11/1/91
Completion Date: 12/4/2006
Total Payment: $732.44 includes taxes, insurance in escrow
Outstanding Balance: ~ $26,500
2000 Taxes Paid - $2,470.18
Water & Waste - $35/month

Apartment 1 - Downstairs - 2 BR, 1 Bath 600 Sq Feet -$420/ Month
Apartment 2 - Upstairs - 2 BR 1.5 Bath 800 Sq Feet- $480/Month
Total Income - $900/Month

I can assume the 1st mortgage & Owner will wrap a 2nd mortgage around it such that when the 1st mortgage is paid, I will begin making
payments to Owner on the balance (it will be something like $8,500 at 10%)

Owner wants a $565 non refundable fee for processing the loan. Is this something that can be worked into a deal If so how would i
structure it?

The property was appraised for $54,900 but the seller needs out quickly, so he listed it with a agent for $39,000 because he needs out quickly, But the agent he listed with doesn’t work with the kind of property so the agent is basically worthless to him. The listing is going to expire in two weeks so the Seller is Very MOTIVATED to get out of the property. I offered him $35,000 and he will gladly take it (He’s already accepted the offer Via E-mail). I have a Dilemma the Property is in Rochester, NY and I’m in Boston, MA So I’m kind of confused on how to do a out of State Deal. I’ve talked to the seller on the phone and sent numerous E-mails to him getting details and such on the Property and going back and forth with offers. Like I said he’s accepted my Offer of $35K thru E-mail.

Now how do I proceed next?

Anyone know how I would go about getting funding for this Deal?

Harsh Reality… - Posted by HR

Posted by HR on February 24, 2001 at 20:33:54:


If I remember right, you are trying (valiantly, I might add) to do a deal before the convention so you can make $$$ and attend the convention, right? Despite your efforts, Jeff, I think you are going about it the wrong way.

What is the next step? Do whatever it takes to upgrade your 1) knowledge first and then 2) your skills. If you don’t have the money to buy some good books out there, use the library or browse for a long time at a Barnes and Noble. Join your local reia group for about $100/year and borrow their library materials. Whatever you do, work on increasing your knowledge and skills.

Nobody here, Josh, can give you enuf info to work the deal. That’s not what a medium like this is best at. This medium is best at giving quick, discreet info on very targeted subjects. Helping you walk step by step thru a deal… and helping you learn how to even conceptualize it so that you can begin walking step by step thru it … is too much to expect.

Don’t get frustrated. Get focused, improve your education, and, I can assure you, you will find deals. And you will make money. And, if you can’t attend this year’s convention, you will be there next year… if you have specialized knowledge and the skills to make deals happen.

Sorry this wasn’t what you wanted to hear. Reality can be unpleasant sometimes, though.

Good luck,


Re: What Next? - Posted by Jeffers CT

Posted by Jeffers CT on February 24, 2001 at 15:30:34:

I’d second Ed’s comments and strongly suggest also the option route if you remain interested.

From a couple of standpoints…

  1. Have you seen the property? Familiar with neighborhood?
  2. What are you gonna do when (if) you get it?
  3. It’s an 8 hour drive to ROC from BOS.
  4. Does present owner live in, or an unhappy landlord itching to get out?
  5. Considering it was appraised for 54K, I’d be inclined to think it was in a less desirable location. (I’ve spent time in ROC)

Lastly, unless you have the ability to operate long distance in regards to maintenance, management, etc., I’d pass. Considering the inability to sell through the listing, it would seem that a quick flip wouldn’t happen either.