Have Motivated Sellers With No Equity!!
I have 3 motivated sellers with no equity and are wanting to give me their properties. They are not yet behind on payments thus have not received a NOD, but simply want out. What is the best way to make money off these leads because I do not want to let them go!!!!
You can purchase these properties sub2 and maybe give $0-$2000 to help the seller move. Only buy if it makes sense to buy at the price and terms.
You can then lease it out with the option to purchase. The following are 3 ways to make money:
1. option deposit from T/B (tenant/buyer). Use this to pay the seller!
2. Difference in mortgage vs rent. You can collect above market rent.
3. back end profit if/when your TB desides to purchase.
Another advantage is that typically the TB pays for maintenence. Maybe say that all maintenence below $200/mo is paid by TB and above $200/mo is split.
You can be creative here although SUB2 is my fav way to purchase properties because I leave existing financing in place AND I get the deed! Get the seller out of the picture. Wraparounds can get messy!
MyCYCLONE...Ooopss!! I Mean MyFrogger (GO CYCLONES!!!)
Is K-REKT!
Another little-known profit center is:
Tax Benefits to the T/B.
Place the Property into a Land Trust and give at least 10% beneficial Interest to the T/B for eligibility to take ---
MORTGAGE INTEREST DEDUCTIONS
and
DEPRECIATION
Per IRS rule:
IRC 163 Sect. B
In our Equity Holding Trust(tm) deals well Market the Property to Tenants willing to Pay HIGHER-than NORMAL RENT in return for the TAX WRITE-OFF!!!
Hopes this Helps!
Derrick
You could also sell on an installment land contract (ILC).
You basically create the note so that there is a spread in the intrest rate which creates a spread in the monthly payment. You also sell higher than market due to offering no qualifying financing, and get a down payment.
Take a look at this thread for more details.
http://www.thecreativeinvestor.com/ViewTopic17482-34.html
Good Luck!
OK!! Say I take the property subject to. I then sell the property for $10,000 more that it's worth and can get this because of no qualifying for my buyer. Is the new owner paying a down payment and monthly payments to me and then I actually make the payments on the loan that I took subject to.
Yes. Although you could set up a third party escrow to collect and make the payments for you.
Bill Bronchick and John Locke discusses this issue in their courses.