15 For 30....what Is This??
What is the 15 for 30 people have been talking about in connection to short sales? It sounds great, but I didn't understand the details.
when buying a prop., get a 15 yr. mortgage with no dos clause (due on sale?) what is this and how does the 30 year fit in with 2 points higher?
You must be referring to my postings with Lufos.
The deal is quite simple: First you buy a property and secure a note with the bank in you name for a 15 year term
Second, you sell the property and seller finance it to your buyer with a 30 year term with a higher interest rate
[addsig]
Good idea in theory (and I haven't read the thread you are referring to) but I think that may seem farfetched:
15 yr loan, 100k, 5% interest = $790/mo
30 yr loan, 100k, 7% interest = $665/mo
you must do this
30 yr loan, 100k, 8.8% interest = $790/mo
A 20 year amortization might be better and would fall under that 2 pt thing:
20 year loan, 100k, 5% interest = $659/mo
30 year loan, 100k, 7% interest = $665/mo
Good luck!
No, NO No,
I am not selling for the same price i bought it for!!!
Do the math again with a 130k sell price!!!
[addsig]
kilocolette,
Welcome to TCI!
That 15 for 30 joke sounds like a fancy discovery. Isn’t it? I sad you don’t know so let me put it this way so you can understand it better: I’d like to offer you 2X the profit you’ll make on such deal if and when someone accept and complete the 30 year term, leasing to own one of yours SFR!!! Am I getting your attention now?
A 30 years term on lease to own is something that I never heard off and would sincerely like to or even better se on paper recorded in county court, assessor’s or recorder’s office. Until then, it's just another one of LUFOS imaginative jokes that someone may have taken too seriously.
The reasons people L/O the houses are because they can't qualify for any low interest conventional loan. What commonly happen two years after they sign the contract to L/O the home is that they can now qualify for significantly better rates based on their payment record, so they either move to a better place or refinance the present one to reduce the interest. Tell them that they cant refinance for 30 years and you’ll see the gun flying in your face, weather you live in NY, Vermont or god forbid in TX where the cowboys still carry them in the way they once did in wild west.
If I were you, I wouldn't count on 30 year L/O to make me the money. What's your gut filling? Would you like to try? I do not think so
Omega1
Omega, pay attention. You are frequently to quick to critisize.
Lufos responded to one of my comments in reference to this 15 for 30 thing. It was not one of his jokes or the other way around.
First of all we are not talking about a 30 year lease. We are taling about a 30 year note. BIG difference. I am sure you have even had one of these if you have bought a house yourself.
This is not a L/O. This is not a rent to own. I am talking about a WRAP!
myfrogger,
Check this math:
My loan is 80k loan @ 5% for 15 yr = 632.63
Their loan I made to them is 120k @ 7.75% for 30 yr = 859.60
In this example there is a 266.50 positive cash flow on top of the fact my principal ballance will always decrease faster that theirs will. In addition to this there is price difference profit in the event of a refi.
Now all, you can play with the numbers all you want but the difference in cost versus sell and term will make a winner EVERY time.
If every time you are given 2 apples and I am given 3 apples, I will always have more apples than you- No exceptions.
[addsig]
Let me ad that this type of deal is ment to be targeted to credit challenged individuals. Not deadbeats.
In addition these notes that i generate are sellable at a small discount, if i choose to sell my "accounts receivable"
_________________
B.G. & Wheeler D. LLc Inc. and Trust
(A division of: Half Vast Enterprises)
"Most american millionairs today (about 80%) are first generation rich"[ Edited by WheelerDealer on Date 02/17/2004 ]
The Wheeler Dealer says it well.
Come on guys this is a really great tool. Just check it out with great care.
The trick of course is in the selection of the person with whom you are dealing. I have lots of friends who have taken a fall for their corporation or a relative or some other non survival orientated move. They are ok, they just cannot obtain credit for a while and thats the man you want. He has a family, he just got dumped on.
Dr. blaw blaw Nelson, was in a medical partnership. One of the doctors did a very naughty thing to a patient and the patient sued. Down came the partnership, money owed in the judgement and Dr. Nelson lost everything. But not his license.
So he sets up a little tiny Family Medicine Practice. One room, a table three chairs and a silver spoon. The spoon you may ask? Well there has to be some way to measure out medicine.
He is to coin a phrase on his knees, but he is in a so so house. No pool except for the broken hose bib. He is paying on a wrap a round at a higher interest and a bigger payment. He will make the payments and slowly get back up on his feet. Perfect guy for this type of deal.
Lots of Dr. Nelson's. Come on lets all help them out. Besides a plus balance every month is fun. And, as time goes on each month it gets better and better.
Enjoy this one, WheelerDealer has described a goody.
Cheers Lucius
Hmm, interesting:
So now, 15 over 30 deal is actually a discovery of a wrap around lease option to buy? I am truly impressed and am still wondering, where did the 30 year part of the original story disappeared in the last couple of posts? I also wonder how many "deals" in the row would the bank allow before it locks the safe's door.
Anyhow, try to pack the same 30 year dream on a COSI or COFI loan and come back to post what did you find out. What I did is another 2+%. Tray this for a change and as Lucius sad, ENJOY.
Inpatient Omega!
Okay, aside from Omega being all, well, Omega about this, how does one over come credit issue? Eventually, you wont be able to do anymore of these. What would you do then? Really, you'd have to be making tons of cash a year to keep getting new mortgages like that. Just wondering is all.
Also, is this just for short sales? I figure that's what it is for.
Yep.
i love it !!!!!!!!!!!!!!!!!!!!!!!!
[addsig]
Bottom line: you may do one or two of this deals and the whole profit you'll make will be summed up in 2 rather then 30 years. After all, there is nothing wrong with that but why borrow on your own name when you can use seller as a bank and do subject to or L/O too? Well, go figure!
taking a deal Sub2 will not work Omega
They key is the term difference. Without it your dead. Just look at the amortizaton schedules to answer this one.
None of the posts are missing, omega, all is in tact.
Kingmonkey,
As long as the propertys are sold the payments offset each other. Not debt income ratio problems. So yes you are right Tons of cash would be made to get new mortgages like that.
This would be for any type of purchase I make not just ones that need to be shorted. The bootom line is I need to buy right.[ Edited by WheelerDealer on Date 02/18/2004 ]
WheelerDealer,
If I tech you a nice, new and neat trick that will make you a ton of money in line with what you are proposing above, AND WITHOUT putting the mortgage in your name, which will limit your ability to buy unlimited quantities of square boxes called homes, would you say thank you Omega, sir? Just like nicely educated Texans do?
I do not like to prejudge your response but for the sake of the learning experience of other TCI-ers, here is what would masters do:
You contact the title company (if you work with one) and you ask them to prepare a list of properties that have a negam mortgage on the dead. You get locked in your room for 48 hours and you think about a nice little letter. When you think you got a good one please fill free to step out of the room to show it to your wife for her gut feeling about the response success. You can also ask your nighbour abouth what he thinks but please be careful because he just might say yes, I'll sell it to you.
Watch your wife's eyes after she finish reading, If she flip her eyes when she says "It's nice, you'll know that you won't let her know when you bay anything thing because she'll soon cost you 1/2 of a deal. Yes she probably lied. The letter was not good. So do it again in a continuing 2 step deal:
First: Lock yourself in the room again and please watch/remember where you put down the key.
Second: when you feel that your letter sounds better this time, start sending offers to nice man and ladies on the list offering to buy their house at full market price, subject to the existing mortgage!
if you do not know how to do that, buy John Locke's course and please do not choke him to death with many WHY questions. We still need him to moderate those posts, posted buy more and more resilient hybrid advertisers that come in all colors and shapes. You are an intelligent guy and if you think long enough you figure most of the answers out before you can clap palm on palm.
To spice a deal you may also want to offer nifty little gifts along with the money in the form of used vehicles for their student sons or daughters, (if their boyfriends don't have one) or the Bahaman Cruse that shouldn't cost you more then several hundreds bucks and would leave $2,000 impression and the deal that you can now wrap around.
If you do that, you'll not only buy many homes but the homeowners will love you for you and maybe even invite you on their daughter's wedding one day.
Say thank you~ and... Cheers!
Quote:
On 2004-02-20 15:05, omega1 wrote:
WheelerDealer,
..........ask them to prepare a list of properties that have a negam mortgage on the dead.
Hmm, in order for me to do this I need to what you mean by this type of mortgage....and how many folks do you think actually have one?
More then you can handle!
Do your homework. It's fairly easy. [ Edited by omega1 on Date 02/20/2004 ]