This just fell into my lap while sitting down at dinner!
Hey board,
Had a lady call me that's trying to sell her house with Century 21, the listing expires in about a week. She's tired of waiting and saw one of my bandit signs.
It's a tri-level w/3bdrms 1 1/2 ba. 1 car. 1/4acre lot.
Mortgage bal. = approx. $168k
Listed for $184,900
Appraised for $185k
FMV = $185-200k
Says the least she'll accept is $178-179k
Also flexible, says she'll willing to do a L/O...and will agree to sign a L/O agreement and still make 1-2 more payments on the mortgage ...which by the way is $1500. ouch!
Her rate is about 7%.
Any opinions on this?
By the way, the house looks good and is in a very nice area w/good schools, etc.
She's also having another house built that will be ready to move into in Aug. says she can wait and let the builder sell it and build her another....but also says that she really wants it and she wants out of the current one asap. Interesting huh?
Thanks, Clif 
By my figures Clif, she would only get around $163K if the realtor sold it (6% RE fee, 3% closing, 3% negotiating on price), so why pay more than that. You know the drill on this
If everything else looks good and she agrees with the above, can you sell the property with a $1500/mo payment? If so, I'd do it (thru subto, of course).
Roger
Do some research and establish what you think is a reasonable lease payment then try to negotiate a lower lower lease payment with your seller. If she has to pay $100 or $200 dollars a month she's still in better shape than having to pay the entire payment.
You could give here a little more on the sales price to get her to go along. With the additional cash at closing she could see the extra each month as a forced savings at a better rate than she could get for any other savings rate.
This looks like a good deal to me if, especially if I could negotiate a lower lease payment. Remember too that a lease/purchase deposit of 3-5% ($5,000 to $10,000) would make up for little negative cash flow on this one.
Just curious, Clif
Do you have any updates on this deal?
Roger
Hey Roger,
She's contemplating my offer, she has 1 1/2 weeks to go before the listing expires...I may already have a buyer refered from a Mortgage Broker friend. She wants to know more about creative REIing....
She says all this time she's been saying no to good people with cash and sometimes good credit, like the guy she's sending over to the house, he can't get a loan due to his residency status, only been here 6 months but has excellent credit and tired of renting, (with cash!).
I think it's going to work out fine.
Thanks for replying,
Clif
Greetings Clif
sounds like a good deal to do Subject to or contract for deed rather than as a lease option. although if you take possesion in your name/business name and /or assigns then you can transfer your interest with little or no trouble.
still if you take it contract for deed you get the tax write off on the interest and so does she.
plus she doe not take a capital gains hit intil the balloon. and of course your balloon should not drop until well after your buyers does. example you have a 3 year balloon and your buyers in a 2 year balloon. that gives you time to re-lease the property, re-fi the property yourself if your buyers do not or cannot perform. you'll have an entire year to sell it outright before you have to cash her out.
do make sure you file the paper work at the county court house to protect your interests in case her finances take a turn for the worse..
good luck
AB
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[ Edited by PurpleMillionair on Date 06/24/2003 ]