Specialist · Portland, OR · Member since 2010 · 3k+ posts · 1k+ votes
Just talking with a local agent I've come to know. She has a buyer that lost an offer on a house because her identity was stolen. She is looking for a owc deal. The broker suggested I buy something and resell to them on a contract collecting a spread on the interest. What kind of profit could an investor hope to be able to make on this deal? Mark-up the property or interest margin only?
Second situation: borrower is a minister and financing backed out on a deal they had on a house. Apparently the underwriter came up with a problem with the way the pastor is paid. They want a lease option. She is suggesting I buy something for them and try to make some money here.
Looks like to me the only way to come out much ahead is to buy something that needs work and improve it and resell it. All in all it sounds like a lot of work. Any thoughts? Anybody try or do this?
Note Investor · Pasadena, CA · Member since 2009 · 849 posts · 544 votes
14y
In either case you're effectively originating the loans, without having created any equity. Not my favorite play.
Instead, buy either property from the seller at a discount (with your cash), then sell back to the would-be buyers at retail. You've made some money right off the bat, and now you can make 8%+ on your carry-back.
Hi Jeff,
Looks like the agent is looking for cash flow. I would get a second opinion. Buy something and offer a contract? How long would you be willing to tie up your money? Option purchase brings in upfront money and very few exersize the option, which could be good or bad, depending on your end goal. Is your agent well versed on either of these types of transactions. I would ask for verifiable documentation. Property prices in Portland are above the 100k mark, and if you finance a property you need 25% down. This is a very complicated transaction, even if it does not appear so on the surface.
Specialist · Portland, OR · Member since 2010 · 3k+ posts · 1k+ votes
14y
Welcome Ren,
Nice to hear from someone just across the river. Saw your bio. You lucky guy getting involved in the Vancouver market. Understand Portland like the back of my hand but get lost as soon as I am over there.
Understand where you are coming from. I told the agent that I'd only be interested if it was a killer deal. If that is the case then I am good with or without a buyer or lease option buyer.
I could move to Washington and not pay state tax on my pension, as in state tax fugitive.
Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
14y
Two people you should never lend to, a cop and a minster, both can be difficult to collect from! LOL
But I have done alot of business with both and it all worked out.
With the SAFE Act, watch your financing the deal, I'd suggest you have the owner occupied seller carry back the note to the end buyer and you buy the note at closing. You could also take an option atn sell at a higher price with the option paid then sell to the end buyer with seller financing and again, buy the note. That keeps the seller out of the option and out of your profits on assignments. Good luck