Subject To Deals With A Lot Of Equity?
When the seller has a lot of equity in the house, do you offer more than "u-haul" money?
What if they will sell but you need to come up with 20k cash or so. Do any of you go for deals like this? What if it's still a great deal at 20k?
If you do go for it, how do you finance it if you don't have that much at hand? You can't take out another mortgage on the place. Can you have the seller take out a second mortgage that you pay him with, then make payments on that second as well as the first?
I'm selling a deal like that now. The house is 250K all day long. The loan is 86K the house needed 30K to be market ready.
It's important to find out what the seller wants. In my case she wanted 50K and uhaul moneyand closing costs in FL. For her equity We settled on 150k purchase. To me thats worthwile. I took over her loan and pd her the balance. You may be able to have your seller get the second, you may need to pay the costs. If they are willing have them pull extra for repairs if needed or there own uhaul money. Paying my buyer the equity has draw backs. I most likely wont find a buyer with 170k down @10% for her 80k loan so I have to sell to a qualified buyer or take out a no doc loan to finance someone . That would be a 279 sell price.
Find out what the buyer wants for the equity they may need less for a quick closing[ Edited by DavidBrowne on Date 09/02/2003 ]
When the seller requires a cash for their equity, I usually give them a note for the amount due in x amount months as a balloon payment. In the mean time, I lease option the house to a tenant/buyer, collect the monthly payments, and cash out the seller when the tenant/buyer decides to buy.
Hope this helps.
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On 2003-09-02 13:16, Joseph88 wrote:
When the seller requires a cash for their equity, I usually give them a note for the amount due in x amount months as a balloon payment. In the mean time, I lease option the house to a tenant/buyer, collect the monthly payments, and cash out the seller when the tenant/buyer decides to buy.
Hope this helps.
Hi, what do you do in the event the tb doesn't exercise the option, or you had to evict them during the 2 years?
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Hi, what do you do in the event the tb doesn't exercise the option, or you had to evict them during the 2 years?
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Hi,
I usually negotiate with the vendor around 5 - 7 years lease option period. So, if the tb decides not to buy after 1-2 years, I find another tenant and obtain even more money through downpayments. To protect yourself, you should negotiate with the vendor that he/she will recieve his/her equity upon the sale of the house. IF the house doesn't sell within the specified time, then you are protected.
Hope this helps,
Joe
Don't most sellers he cash for the equity NOW rather than years in the future? What else can you do if you find a sweat deal but you don;t have a large sum to throw down???
Quote:
On 2003-09-03 02:23, mkucera wrote:
Don't most sellers he cash for the equity NOW rather than years in the future? What else can you do if you find a sweat deal but you don;t have a large sum to throw down???
If the seller needs the money NOW, then the only other option that I can see is to get a lender whether it's a conventional loan or a private one. You could find an investor for the cash needed, and split the profits with him/her when the TB cashes out.
Hope this helps,
Joe