Possible 1st Deal But Not Sure How To Structure

Comments(7)

• 
  rjs935224th January, 2004

  Quote:
  On 2004-01-24 01:24, winuinc wrote:
  Hi
  I have a contract on a property for 215K; repairs 30K; ARV 300-320K. I want to wholesale it for 225K. Another investor from my REIA group has a couple that are interested in buying it for the 225K but they can't get their own financing at this time. The couple should be able get financing by the end of the year. The couple can put 10K down and do a lease/option for 1700-1900/month assuming that the seller will carry back financing.
  
  Assuming the seller will carry a note for a year (won't know till later today), how would I structure the deal so that I can get my assignment fee?
  
  Thanks
  winuinc
  
  
  Winuinc -
  I'd be real careful here even if you were able to have the seller carry back a note for one year. If you put these people in the house on a lease option they have the *option* to purchase the house, not the obligation. If they opt out you're stuck with the house. I'd probably structure the deal to where they are obligated to purchase the house. This could lead you into trouble however if they decide to not pay, because now you might have to foreclose on them instead of evict them. Whichever route you go, make sure your contracts are solid and you've got yourself covered.
  
  Good luck,
  Ryan J. Schnabel

• 
  rcummings24th January, 2004

  Just go into contract to purchase from your seller, then assign the deal to your buyers. Find out if the seller is willing to do a L/O and find out how much he wants down. Then have your buyer step in your place and give you the assignment fee (and they can give the rest to the seller for whatever his option fee is)
  
  If you assign the deal you are not responsible down the line if your buyer does not perform.

• 
  tinman175524th January, 2004

  If the proposed buyers have 10% down and the property isowner-occupied, and they can't get a loan now. What makes you think they can get a loan in 1 year???

• 
  rcummings27th January, 2004

  tin,
  
  Are you in the mortgage business??
  
  I'm not sure if you know it or not, but a lot can happen in a year. It also depends on how their credit is now. Someone could have told them that their credit would be repaired by then and they could buy in a year and the buyers could be impatient and don't want to wait that long and want to act fast.

• 
  tinman175527th January, 2004

  Quote:
  On 2004-01-27 16:07, rcummings wrote:
  tin,
  
  Are you in the mortgage business??
  
  I'm not sure if you know it or not, but a lot can happen in a year. It also depends on how their credit is now. Someone could have told them that their credit would be repaired by then and they could buy in a year and the buyers could be impatient and don't want to wait that long and want to act fast.
  
  
  Yes , I am, since 1987, as a broker since 1991. But I have been a "landlord" since 1988. Peoples lives change every 3 to 6 months. I buy and sell or rent houses all throughout the year. My friends and I figured out that between 1990 and 2000, less than15% of all land contracts that we had set up with people had actually paid for the property in full. 65% had to be evicted, 5% died, 12% left town in the middle of the night, and 14% refinanced and bought the house. Since 2000, I have been moving away from Land Contracts. I would rather buy and rehabb at less than 50% FMV and sell for 80-90% and pay for all closing costs.
  
  I personally did not receive January's payment for rent until last saturday from 45% of my tenents because of xmas. Foreclosures are up, credit card bills are up, gas is up for cars. I don't mean to sound pesimestic because I love my job. I would rather people using the banks money and telling them their hard luck stories instead of me. (why they didn't make a payment)
  
  And anyone could get into a financial difficulty, that's why I use big margins on my rental properties
  
  LORI
  See my profile
  [addsig]

• 
  rcummings27th January, 2004

  Tin, I feel your pain...that's just the hazards of the job! Congrats on your success....

• 
  JohnLocke27th January, 2004

  tinman1755,
  
  Lori,
  
  Out of curiosty how did you structure your land contract, as you use the term "landlord" in your post.
  
  John $Cash$ Locke