What's Your Most Creative Deal?
I thought I would ask a question and get everyone to chip in with their experiences. Can you tell us what your most creative RE deal has been? I thought this might help newbies (like myself) think outside the box when it comes to creative RE.
It could be a story about how you "bought a corvette to sell with the house" like John's story, or how you "bought a piece of proprty with trees, sold the trees as lumber and paid for the property", etc. What has been your most creative RE deal?
Thanks,
Robert
[addsig]
Mark,
Are you free to share the details about the project and how you are finding a new use?
Robert
[addsig]
Well Robert,
Creative in what way? Although I am always partial to the deals I am putting together now probably my most creative deal involved a management agreement with an option to purchase on an industrial building that was loosing money. Part of the "most creative" category would have to be the financing mechanism but it also involved finding a new use for what was essentially an obsolete building.
Most of my transactions are not that creative, however here is one that I did some years ago when I was involved with notes.
A lady contacted me about a carryback on a condo that she had with a face of $21K at 12% for three years. The note was in third position and she was getting offers of $17K which was too big a discount for her. The second was due soon and I had enough cash to cover it if it defaulted and if not this note would soon be in second position.
I asked her why she wanted to sell the note and she said to get tuition to send her son to Catholic school. When I asked how much she needed she said $3500. I offered her $3500 for the note and gave her an option to buy it back for $5000. She accepted.
The second was paid off soon and payments of $210 a month were coming in regularly. Within 8 months the new condo owner asked me to subordinate my note to a new first. I refused. He then asked me if I would take a $2K discount on the note. I told him I would get back to him. I called the lady and asked if she would rather have $19K now or $21K when the note was due. She took the $19K and I got my $5K immediately.
The numbers were not huge but I did get a very good rate of return. I would not do this deal today because of concerns for usury.
Regards,
Ed
[ Edited by edmeyer on Date 09/26/2004 ][ Edited by edmeyer on Date 09/26/2004 ]
Ed,
Thanks. That is creative.
Robert