[Jackie Lange]

Jackie Lange

This house was built in 1997 Seller moved to Dallas. The house is vacant.
Balance $142,900 Payment of $1,173.99 piti at 4.375% – you can buy subject to the mortgage

But, most comps on the same street put the value at about $135,000 – $145,000 max
Rentometer shows rents at only $895 so renting is not going to work

Looks like “no deal” – BUT you could think outside the box to ….

Get an option to buy subject-to the mortgage then do a highest bidder sale for the highest down payment.
Sales price $148,000
with $3,000 starting down payment bid.
You would be able to get $14,000 down – maybe more
not much cash flow in this one though

anyone interested??

[Hugh Hill]

Hugh Hill

Jackie,
When asking for loan amount and payment from the seller, do you just ask flat out or do you use “Jedi mind Tricks”? Do you giving a sample conversation.

[Hugh Hill]

Hugh Hill

Since this property doesn’t have any equity and seller willing to do a subject to. You suggest to do HBS for down payment. Are you staying in the middle after the sale or you doing a sub2 assignment and you just walk away after the sale?

[DON WEDE]

DON WEDE

Hugh,
I have never had a problem getting verification of note and mortgage balance and history from a serious seller. They realize that if I am in the deal I will have to have this information. For me if I get involved in such a deal, I always stay in the deal to some extent. I don’t want to be the architect of a deal and walk away and leave the seller in a bad spot if the deal should go sideways. I do let them know up front that I am not guaranteeing performance and that there is some inherent risk. I do let them know that I will do what I can should the deal fall apart at some time. Of course if I am going to be potentially still in the game I will continue to have some financial incentive in the deal.

Do you see where there could be more profit in the deal then just the down payment? I guarantee you there is. Who can come up with some ideas of the deal beyond the deal for just the down payment? To tell you the truth the deal is skinny and I would not be overly excited about this one. If it was in my backyard I new the market well and was an area I liked, I would do the deal.
Don Wede

[DON WEDE]

DON WEDE

It has been almost 4 days now and ideas have been submitted so I will explain what I meant by more profit in the deal than the down payment. The first mortgage is at 4.375%. Wrap the first with lets say a 6%-7% note. This should generate at least $200 a month over and above the outgoing first. If you take the seller out of the picture then this would be pure profit for you. If you keep the seller in the deal to avoid any Dodd Frank issues, then take lets say a 50% undivided interest in the wrap note. You service the note and pass on a check to the past owner each month. Include in your agreement that you have the right to any late fees or penalties. You could include in your agreement that in the event of default and foreclosure that the seller has the right to buy you out and foreclose, and if not then he forfeits his interest in the note.

Don Wede

[Jackie Lange]

Jackie Lange

Hugh – you just flat out ask.. in a professional way. If the seller is motivated, they will give you what ever information you ask for.

Don… You are absolutely correct. With a spread in the interest rate, you can get about $200 a month in cash flow on this property too. And if it were sold with a highest bidder sale for the highest down payment, you’d get about $14,000 up front. Not bad for a no equity deal!

So sad that no one has been interested in doing this one.

[DON WEDE]

DON WEDE

Jackie,
I just do not get how people can pass up this kind of money. In the future, after we get back from Panama if you have any real juicy deals that someone passes on let me know. I will spend a week on the road for 10K – 20K.
Don Wede