How To Structure A Deal??
I would like to purchase a three family that needs cosmetic repair. Been on the market "forever". Finally at a reasonable price. I can get the house for 30% below FMV. After fix up(carpet, paint, new cabinets) it will appraise a lot higher( about 40% below FMV). What is the best way to structure a deal with nothing out of pocket? I have read all the books and am to the point of just doing it. It is not rented. I am married to one who doesn't understand the real-estate thing. Doesn't want to "tie up" $$. Got any great ideas??
Tess,
Provided your numbers are correct, you have probably found a workable deal.
You're asking us to help with this deal. In order to do that there is alot we would need to know.
1. What is the motivation of the seller to sell this property?
2. Is there a loan balance on this property ?
3. Does the seller own it free and clear?
4. How motivated is the seller?
5. Do you know if the seller is open to creative financing ideas in order to sell the property?
6. If your spouse doesn't understand the "real estate thing" and doesn't want to expend any monies where are the funds to do the fixup coming from?
I'm sure other posters will have other questions, but this is a start so we can try to help. Good Luck.
Dave
[addsig]
Tess- As Dave stated, give us some more info so we can walk you through a win-win situation on this one.
The general idea is to get control so you can get the work sorted before putting any money in.
Until you post more it is hard to say what is best.
You could L/O the property, you could have the seller refinance and then take over the payments, you could get a hard money loan and then offer a second for the balance
Many options but more info please.
John
[addsig]
Sorry all- haven't had access for a couple days. The seller is willing to "go creative" He is wanting to get rid of his investments and retire. He owns free and clear. No liens on house. If I can get into the house with no money down, then my other half would be more willing to use our line of credit for fix-up. (He doesn't believe people can get into a house with no money down). I would like to fix up and refinance quickly. Renters would not be hard to find.
Tess,
I think I see the real issue. You have a spouse that is a naysayer and wants you to prove that you can acquire a property with no money down.
You may be able to accomplish that if your seller is "really motivated". Sounds like your credit picture is O.K. so you may get the seller convinced that your monies have to go toward fixup and that you have the creditworthiness to get a loan and cash him out on a short term basis.
You say you want to refi quickly, so ask the owner to do seller financing for a year with cash out at the end of that year at a rate below what a HML would charge you and try and take it that way.
What I strongly suggest is that you and your spouse have a long and detailed talk about your future in REI and the benefits for both of you. Good Luck.
Dave
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"Opportunity is missed by most people because it is dressed in overalls and looks like work." (Thomas A. Edison)[ Edited by dealfinder on Date 06/23/2004 ]
Tess- Take the purchase price and add in the fix up. Then add your down pymt and closing costs. This is the total that you want to mortgage to make it a 0 down deal. There are several ways to accomplish this and I'm sure a title co. in your area could advise on how to close the deal this way. We just closed this same deal a short while ago. Good luck.