Land Trust Deal On Ebay
Hey Guys I'm a newbie that has been looking to get into REI for a while now. I have noticed on Ebay that a company holds certain properties in Land Trusts and then for a certain price assigns it over to the investor. The houses all have around 10-20k in equity based on comps from other properties. With a cost anywhere from $2k - $15k. The investor then simply takes over payments. I was wondering if anyone has had experience with this. I know that if something sounds to good to be true, usually it is. The properties are usually in Fort Worth, and Austin Texas and are only a few years old. Any advice would be appreciated.. Thank you in advance
If something sounds too good to be true, it usually is, but sometimes it is not.
From my experience, if someone is trying to talk you into it, it may be too good to be true. However if you're hunting down a niche and exploiting it, it usually is not.
There are a lot of people out there selling RE at about 90% of FMV. That isn't good enough for most of us here, but it is good for many people who would have otherwise paid retail. Do your homework. A good deal is a good deal.
I've dealt on Ebay for years, and have a property listed there now, using their "ad" format. It looks like I'll be selling it via Lease-Option, which I prefer. Ebay is a great venue for offering property or whatever, you get lots of interest and emails and phone calls that way.
I just found a deal like you describe searching on Ebay--wasn't hard--near Austin, if this is your seller (or not), note that, as Hibby says, a few thou below appraisal (who's appraisal? When?) or FMV may be a pretty narrow number to work with. Also that your seller is brand new to Ebay and may not be describing everything precisely. The seller is an investor too, surely, and has already reserved most of the profit for him/herself.
They are advertising on Ebay to broaden their reach, and in the hopes of finding a retail buyer (or investor) who isn't afraid to buy without a Realtor on some fairly unusual terms (for retail buyers used to the conventional Realtor/bank purchase process). Looks like they're offering to, effectively, subcontract a Sub2 deal, though I may be wrong about that. Most bank loans aren't so easily assumable as this seller suggests. And be aware that renting (and/or making the payments) may not be as easy as you'd like, and there may be drastic implications for missing a payment or two.
Better you contact them as a bird dog or whatever, and offer to work with them. Maybe you can sniff out a foreclosure or two for them to buy, for a fee. No investor would turn you down if you bring them hot leads. Get a contract in writing, though and document your efforts, though if you bring them good leads they'd be nuts to screw you over. But a word to the wise...
I lookied into one and it isnt as profitable as it seems. The ones that I see on ebay are all in Texas and Phoenix area.
The home I was going to purchase had 30k in equity but I would buy the "deal for 7k. After going to investmet meetings and meeting people and such I learned that 7k is way to high. I was planning on listing the property and selling it then take the profit I had made. I didnt realize that realtor cost were so much. They charge around 7 percent. If you have a mortgage of like 150,000 and you sell the home with a realtor thats over 10,000 in commisions. anwyays, I called the person who had the deal and he made it seem like I was getting the best deal in the world. I did some research on the home and found out that the home had already been listed with a realtor and had been sitting on the market for over 6 months. The person selling me the deal didnt mention this to me and told me that it would sell quickly. After I told him the info I found out he never talked to me again. I learned from this that you shouldnt do any deal that you can not view, and check out yourself. There are deals everywere around you. Also after I learned about the commisions that realtors make I went and got my liscence for only 200 dollars.