What would you offer? - Posted by Antoine (GA)

Posted by Brent_IL on February 11, 2004 at 12:16:55:

My thought was that if he got a new loan for $63,500 the payment would be less than $380 a month. If the comps are right, he could bump the CFD to $75,000. A new T/B would come in with 3% to 5% down to cover the costs, and will pay the taxes and maintenance expense, so Antoine would get something out of his deal. Not a good deal, but it’s one more.

What would you offer? - Posted by Antoine (GA)

Posted by Antoine (GA) on February 11, 2004 at 09:11:22:

There is a long distance landlord who is trying to sell his property through a Realtor. There is a tenant in the house now. No repairs are needed. House was built in 1996.

Comps: $72,000
He Owes: $61,000
Current rent: $700/mo.
PITI: $602/mo.

I can get a %100 loan. My exit stratergy is to L/O it to a tenant/buyer for 2 years. Current tenant wants to buy it, but was turned down b/c of her debt/income ratio.

Here’s a thought - Posted by Gary-IN

Posted by Gary-IN on February 11, 2004 at 12:00:33:

I would not get financing on this. Since it is listed with a Realtor, you can tell him you will buy his house subject-to if he can get the Realtor to release the listing, or you can wait until it expires.

As for getting the tenant financed, try ARMs, have her ask for a raise, whatever to change the D/I ration in her favor.

Good INvesting,
Gary

Re: What would you offer? - Posted by Brent_IL

Posted by Brent_IL on February 11, 2004 at 11:58:12:

To get an offer accepted, we have to know what the seller really needs out of the sale. Otherwise, we are negotiating with ourselves.

If the owner wants cash, offer $63,500. Maybe he just wants to get rid of the long-distance maintenance. Offer to take over the payments and maintenance and split any equity over the loan balance upon sale in three years.

Will the rental market support a significant bump for a L/O payment, so that you can get some cash-flow out of this?

Remember that any money that the tenant pays you in excess of what she is now paying in rent cannot go toward improving her debt/income ratio.

Thanks (NTXT) - Posted by Antoine (GA)

Posted by Antoine (GA) on February 11, 2004 at 12:38:11:

Thanks (NTXT) - Posted by Antoine (GA)

Posted by Antoine (GA) on February 11, 2004 at 12:40:50:

Thanks.

Why? - Posted by Gary-IN

Posted by Gary-IN on February 11, 2004 at 12:04:18:

Why would you offer 64.5K on a property that comps at 71K? This is a slim deal, and there is no way you should finance this unless the owner finances it by allowing you to buy sub-to.

Good INvesting,
Gary