All Forum Posts by: Belinda R.

Whatever you do dont be afraid to continue with what your original real estate goals are. Just learn from this lesson and keep investing....the horse will be waiting for you to get back on it. 

While certain liens may legally take precedence over a first-lien mortgage (like an IRS lien), the buyer can't willfully kick you out of first position by taking on another loan/lien.  The other lien holder would either have to take a secondary security position, or secure the loan with something else.

So, you don't have to worry about the buyer getting a HELOC or another loan...

So with a $50K all cash offer, I say counter with your number and offer seller financing for the balance.  Last year I sold to owner occupants with $150K cash and carried back a small note in first position to get the deal where I needed it to be.  Lien in first position with tons of equity is about as strong a position a lender can be in.

What are you offering for co-op with the buyer's agent?  You might try offering 4% vs. the usual 3%.  That should generate some visits/offers if nothing else.  

@ Belinda OMG! Is all I can say about your current situation and the suggestions that others have given.  Okay, that is not entirely true.  I actually have a much better solution to your dilemma.  

I hope I do not offend anyone on the thread when I give you other options.  I will try and walk on egg shells as I tackle each one. 

Let's start with your $50k cash offer and holding a 2nd mortgage on the remaining amount.  I'm guessing your attorney that had advised you does not know that much about real estate transactions or withheld some very important information. Although he/she was correct about the one part about having to foreclose if payment was not made there is a better option to help protect you.

As for that other person in this thread suggesting you take 50k and hold a 2nd in hopes to foreclose, unless you like having someone live in your home rent free for 12-24 months than I would not raise my hand for that. ( Been there, did that. No f- - -king thank you) 

Now here is some better options to help you out of your current situation.  

1) You could take that buyers $50k and go with one of the other people in this thread mentioned, " get them to go up on your asking price of $94k provided that is in fact one that would appraise.  Now comes the little creative part.  You could deed the property over while holding the 2nd mortgage, but have them sign a quit claim back to you in case of their default.  This way if they get stupid you can evict instead of going through the foreclosure part.  ( I would run this by a real estate attorney on how to structure that or I could show you.) 

2) Option, you could offer lease purchase terms at full asking price with some down payment in place. Start getting monthly residual while getting the continued tax write offs.  You can write off up to 70% as a loss for the first 5 years on a rental property and if they default you keep the down payment tax free because there was never a closing that took place. ( Again, be sure to talk to your local CPA because some states may have different laws, but I do believe it to be true in all 50 states.)

3) Fire your agent.  This is an extra cost you don't need.  If you don't know the first thing about marketing a home for sale or drawing up contracts, negotiations, etc you can always hire an agent on a retainer to help with minimal services. 

4) If you are really wanting to get cashed out to buy another property than I guess the 50k seller held 2nd would be the most attractive of the 3 options above.

Now we have a turn key operation at our investment company where we can get our fellow investors 100% financing deals all day long.  In addition, we provide a 50/50 partnership and have a tenant/buyer already in place before you close on the home.  Now if it needs work we roll in all those cost into the loan as well to make it easy for you. Just something to consider moving forward on your next venture.

Don't beat yourself up too bad.  You can still come out of this in great shape provided you follow one of these above options.  If not, we may watch you run off the side of the cliff.

Feel free to reach out to me if you have questions.

Peace,

@Belinda R. 

Not sure why you are so willing to take a loss on this property when you already own it outright. You've put all this work and money into it, you'd be better off renting it out for a year. Put some cash back into your account, then try and sell it again next year. You could also just refiance it and pull 80% of your cash out and use it to fund your next deal. 

I don't know your situation, and maybe you just need the money back ASAP, but it looks like you are sitting in a good spot with a fully paid asset. You can sell it for a loss anytime.  Since you own it out right you could even hire PM to take care of it for you and still cash flow. 

If the seller defaults the house will go to FC and you will get what is owed to you including late fees. legal fees, remaining principle balance etc.  You might get delayed but nothing to fear here.

You could also market the house with owner financing.  Something along the lines of $5,000 down and $500 a month buys this house.  You can then sell 5 years of payments for  @ 20k and do that every 5 years for 30 years and you will net 120k over time.

If you sell with the 50k down you can finance 25k for 10 years at 6% and the payment comes out to $277.55.  you can then sell the remaining balance on this note to a broker for @18k at (for a 14% yield) or find an end buyer looking for  10% and net 21k, or hold if for 10 years and collect 33k in payments.

Lot of options here.