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Dear Jackie,
I have an opportunity to get an option on a house for 265K. This house was listed on the MLS 2 years ago at 599K and then dropped to 489K where it expired. I think I could sell this house quickly for 325K, my option price is 265K .
Seller is aware that I will be finding a third party buyer.
What would be the best way to handle this deal without the homeowner or my buyer knowing how much I am collecting in the middle.
Do both sides need to close at the same title company.
Should I use an option agreement or a purchase and sales agreement between me and the seller?
Obviously I don?t want to have to fund this deal.
How do I get my profit on the HUD. I listened to one of your interviews a few weeks ago and the interviewee said it shows up on the HUD as ?clear claim on title?. What do you give the title company to get this done?
If somebody could break this down step by step for me it would be helpful.
I purchased the Jack Miller Option Course, I am only through the first CD and don?t have time to get to it all before I meet the seller.
Thanks
Mark
Mark
If you don’t want the seller or the buyer to know how much money you’re going to make, then you’ll need to do a simultaneous closing. If you’re buyer is getting instutional financing then there will be a problem with that UNLESS you have the seller deed the property into a land trust and they sell you the beneficial interest of the trust.
Getting financing for your buyer will be the hardest part! especially with all that’s going on with financing right now. If they can’t get financing….
You may need to buy with seller financing, then sell with seller financing (get a good down payment) until your buyer can get financing lined up. It will be a lot easier for them to refinance than get a new loan.
To buy, you’ll just use a purchase agreement with a contingency clause which says you won’t close until you find a buyer and can make a profit.
Jack’s Option course will have all the contracts and forms you need.
Congratulations! GREAT DEAL
Jackie,
Thanks for the advice. I put this house under contract yesterday at 275K. I used the contingency clause you recommended. I’m really optimistic I will be able to find a buyer for this house. Once I find a buyer and determine their financing i’m sure I will have more questions. If so I’ll post then.
thanks
Mark
Jackie,
As you pointed out above, “It will be a lot easier for them to refinance than get a new loan.”
That has given me several thoughts. How long do you think an owner finance deal would have to season before a conventional lender would consider a refinance? I presume there would need to be some reason on the borrowers’ end for the new loan; like better terms or to make improvements.
Seems to me, as the seller, I could use this to establish the property’s value and improve the buyer’s bankability, with a not too distant cash out.
I have made some calls locally but can’t get an answer I trust. What do you think would be workable?
Thanks
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