Little If Any Equity, Can There Be A Deal Here?

Comments(14)

• 
  nebulousd2nd November, 2003

  if you have the deed,
  sell on a land installment contract.
  
  sell for $265k, 25k down.
  make up the back payments, make sure your buyer is paying enough to cover the monthly mortgage, have them refinance in 2 years or earlier.

• 
  hammond2nd November, 2003

  thanks for the info, I also found out that piti is 1900, so structuring a good monthly may be difficult, do you agree or can there be something done here also?

• 
  nebulousd2nd November, 2003

  On a house that much, people have no option but to pay a $1,975 a month payment
  
  Think about it, if your seller is paying that much, there must be at least one other person out that can make it too.
  
  I personal would get 30K down just to keep the buyer honest and make sure they can make the payment.

• 
  nebulousd2nd November, 2003

  if buyers went conventionally, they would have to put down 15 to 20%, you are offering great terms and you shouldn't have a problem

• 
  hammond2nd November, 2003

  Thanks again for you replies, helpful indeed.
  Here is another scenario for you: grant deed property and sub-2
  1st 208k @ 7% 1471piti
  2nd 54k @ 13% 481piti
  ppp 1st 6500
  ppp 2nd 2800
  SMUD 8500
  total 289k
  monthly payments are current
  arv 295-300k
  How would you structure this deal?

• 
  nebulousd2nd November, 2003

  I have no clue what you are saying. I'm sorry for my ignorance.
  
  Help me out
  ARV: _____________
  Total owed: ________
  
  Total Payment piti_______

• 
  hammond2nd November, 2003

  Sorry for any confusion, here are the #'s
  
  arv: 310k
  total owed: 289k
  mthly piti: 2k

• 
  nebulousd2nd November, 2003

  sell for $319,900
  (with a $100 application fee )
  
  20K down
  2200 a month
  
  since there is not a whole lot of equity on such a large house, you can get a 20k easily and to make some more money, you can ask for a higher monthly. remember, for someone to qualify for a loan for this house, they are going to have to jump through some hoops and they may need anywhere from 10% to 20% down. you should be able to sell this one fast.

• 
  hammond2nd November, 2003

  How could I work around prepayment penalties so that it wouldn't affect my spread but possibly the buyers or is there some other way?

• 
  nebulousd2nd November, 2003

  tell the buyer they are part of the closing cost.
  
  raise the price or get a bigger monthly. or possibly get the seller to give you some cash to handle them, say 50% or 75% of the total pre payment penalty. Remember this is the sellers problem and if they want to solve it, they may need to help you out. I've heard of investor's getting money from the seller in order to take the house, it is not unheard of. But to get around it, figure out how much it is, get some from the seller and some from the buyer. put it in a interest baring savings account and wait until the buyer re-fi's. [ Edited by nebulousd on Date 11/02/2003 ]

• 
  rcummings2nd November, 2003

  Find out when the prepay is up and have you buyer buy/close after the prepay ends (that's if it's not to far away)
  
  You can try to include the prepay amount in the sales price or make it part of the down payment (set it aside for the future closing)
  
  Most prepays are 2-3 years and if you want you can have your agreement set up to close with your buyer at the end of 2 or 3 years.

• 
  hammond2nd November, 2003

  thanks, i may consider including the prepay in the buyers down. and most importantly, find out when it may be due.

• 
  InActive_Account2nd November, 2003

  Are the prepays hard or soft?
  
  If they are soft and it is a sale then they do not have to be paid.

• 
  InActive_Account2nd November, 2003

  nebulousd,
  
  I like how you keep it simple. KISS works every time.