Paul Julian
Active 1 month, 3 weeks agoForum Replies Created
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Thanks for confirming Jackie. I have a 3/1 leased in Mabank with an option to buy within a year at the mortgage payoff plus 2k to the sellers. The underlying note is at 12%, 30 years.
My first option is to get him to come down to 6% and let me take over payments. He wants the income. Second option is to find a joint adventurer, a la Dennis Koelsch, and have them put up the money to own it 50/50 with me doing the work. Third is to go to the bank and get a new loan at around 6% on a 15 year payoff.
Any ideas or suggestions are appreciated. Thanks.
I appreciate all of the great replies. It is clear, as Jack and Peter have always taught, that there is no one way to go about anything in real estate.
The scenario that prompted the question was where I had found a cheap house in the MLS that I knew was this guys cup of tea in his earlier days. He has had medical issues but still wanted to accumulate some properties but wasn’t able to do all that he used to. We talked and I told him that I was able to do a lot of the physical work if he would provide the money and expertise. I would not take anything out of the deal until he had all of his money back. I would get the benefit of the experience and learning how he did things as well as half of everything after that.
When we got to the point of making an offer, he immediately posed that the property would be in his name. I knew that wasn’t the way to go but wasn’t sure how to explain the other possibilities in a way that made him comfortable. We did not end up making an offer on the property.
I agree with Hank. I only deal with people that know me as someone who can be trusted to go above and beyond to keep up my end of the deal. I will keep trying to find the right person and the right structure for each of us and keep the group posted.
Thanks again for the helpful responses.
The following is a description of how to do a highest bidder sale exactly wrong and still come out ok.
My son-in-law and I went in together on a mobile home deal in Tyler Tx. The only real plan he had was to try and get a deal on a mobile home and make some money with it. I was funding the deal and providing encouragement and resources.
We bought a 1998 singlewide in good condition that was in a nice park. First mistake was buying instead of optioning it. The people had put a contract on a stick built and had to close the mobile home to afford to close. We should have let time force the price lower. We paid 11,000.
The park management seemed friendly enough about it and said basically pay the rent and don’t bother your neighbors and things would be fine. Once it was closed, we immediately put ads on craigslist and a sign in front of the home.
He was taking the calls and I was posting the craigslist ads. Each of us still have real jobs to go to and we didn’t hussle enough at the start and it drug on with no clear plan on our end of what to do with this thing now that we had it. Sell it, rent it, move it. We were way too indecisive.
More than 3 weeks in, I tell him that we are going to do a HBS. He had read a little bit about it and I had wanted to do one for a while, so this was a good opportunity. We put it on too quickly, didn’t have enough signs put out, not enough flyers. We did do several ads on craigslist which got a pretty good response.
After the closing bell on Sunday afternoon, we had a grand total of 5 bidders including on gentleman who has a 40 space park in Tyler. He talked to us for quite a while and gave us a lot of good information and also will be a good buyer for certain price range homes.
We came home and sat at our kitchen table Sunday evening and started making calls. The highest bid to start off was $700. After 5 rounds we got it up to $9500 from the gentleman with the park. Although that was below what we needed, it was great information on what the market was for that home and let us know how much we should have paid.
We still had a home to sell and we started thinking about having it moved to a park closer to us, with cheaper lot rent and just renting it out, although we didn’t really want to pay to have it moved just to pay lot rent somewhere else. We also looked for small tracts of land that either had water and sewer already or where we could provide it reasonably so we could collect rent on the trailer and the land.
We kept ads on craigslist for rent or for sale and just as were about to get it ready to move it out of the park, we got a call from a guy looking for a home to move onto his land for his son. That was a Tuesday and by Friday we had a check for enough to cover all of the expenses and put about $1500 in my son in laws (daughters) pocket.
We made a lot of mistakes but we were excited and anxious at the same time even though it was a small deal. I asked my son in law if he ever learned this much in any of his classes while getting his degree in finance from UT Tyler. He said not even close. I think that makes it worth the most.
Thanks Hank and Jackie. I did talk to one title company last week. I will hit others in the next couple of weeks.
If you were going into a totally new area, how would you recommend deciding on which areas of town to focus on and what is the one technique you would apply first to get some potential deals coming in?
Thank you Jackie. I almost bought one when they first came out in November but held off. I hope at least a couple of the people I gave the one month membership to turn into subscribers. I guess I can save you the cost of shipping since we’re so close. Thanks again and Merry Christmas to everyone at Cash Flow Depot.
