how would you purchase?

Question

ok, a prop i want to purchase is listed at 21k, it appraises for 40k.  i need 20% down and the lenders only lend lesser of two right?  renters are in place and want to stay at 400/ mo.  how can i purchase and use the equity for the next deal which is almost the same...app at 32k, purchase at 18k with 400/mo renters in place?  my credit and and debt/income is great, cash on hand is issue, but i can afford 20% on 1st prop,  just want to stay out of my wallet if at all possible
thanks in advance

Michael R. · Answer

Why wont you be able to resell in under 90 days if you buy with owner financing? I never heard of such a thing and I buy all my properties via owner financing

Charles Savidge · Answer

ok so I'm new to RE investing two but my understanding is that you can perchise a house under owner finnancing you just won't be able to sell within 90 days which still leaves you with lease option and rent.

Chevis Duncan · Answer

lease option and rent is what iam looking to do

Chevis Duncan · Answer

yes, jon
they are in pretty good shape.  i could do a little updating and possbly purchase a little cheaper.  but our area has been hit so hard, all i have approached for hard money is scared to death, but i am still working it every day.  i will ask about owner fin.  but i dont understand what a subject to is?  can i get some insight from you guys?

Chevis Duncan · Answer

thanks  jon

Jon Holdman · Answer

Is owner financing or a subject to possible on either deal?

Hard money would be an option, but its a pricey one, and depends on you being able to add value.  These sound like they're in decent shape, so the bank can make a pretty good argument the purchase prices are the real values.

Jon Holdman · Answer

Subject to is taking over the existing loan. Not assuming it, just start making the payments. Only makes sense if the existing balance and terms are reasonable. If the property is listed, you might have to pay the comissions out of pocket.

Chevis Duncan · Answer

thanks curt,
i understand everything you said, thus the title  of the post....
so how can i aquire these two?

Curt Davis · Answer

Chevis,

These days it is almost impossible to use equity from one property to use for another property. Also this is not your primary residence so it is even harder to do. My question is why would you want to use 20% of your own money? There are far better deals and other ways to buy property that will have a better return.
That is just my two cents.