All Forum Posts by: Christopher Robert Noland

Some lenders will use 75 percent of the potential rental income to qualify if it is empty in a DSCR loan. You probably will need a hard money loan

It sounds like you're facing a typical challenge with a flip property where interest isn't quite translating into offers. Here are a few strategies you can explore to address the current situation:

### 1. **Diagnose the Problem:**

- **Market Conditions**: Check if other similar properties in the area have also seen slow movement. If other homes are selling slowly, this may be a broader market issue.

- **Feedback from Showings**: It’s important to get detailed feedback from potential buyers and their agents. If the lack of showings is due to specific concerns (like the cesspool or possible mold), address those issues head-on.

- **Address the Mold Concern**: If one buyer raised mold concerns, even without evidence, it might spook other potential buyers. Consider having a mold inspection done and include the report in your listing documents to remove doubt for future buyers.

- **Cesspool Issue**: While cesspools are common in your area, the limitation of not being FHA-eligible could be a barrier for many buyers. Highlight the benefits of conventional financing or cash offers, and ensure that the cesspool is properly disclosed.

### 2. **Reassess the Pricing Strategy:**

- **Current Pricing**: You’ve already made a price cut from $259,900 to $249,900, and while there has been some activity, it hasn’t yielded offers near your target. Look at how your property compares with others in the price range.

- **Time on Market**: After two weeks, it's a bit early to panic, but the lack of significant showings does suggest something might need to be adjusted.

- **Next Price Cut**: If you’re going to drop the price again, it’s important to make the cut meaningful enough to generate new interest. A reduction in the $5,000 range may not move the needle enough. Dropping the price by another $10,000 to $15,000 could help get it closer to what the market can bear.

- If your goal is to sell at a minimum of $225,000, consider dropping the price to around $239,900 or $235,000. This could open up a new pool of buyers.

### 3. **Marketing Enhancements:**

- **Highlighting Key Features**: Ensure that your listing photos and description emphasize all the positive aspects of the home (recent renovation, location in the Poconos, proximity to amenities). Consider hiring a professional photographer or even staging the home to make it stand out.

- **Addressing the Cesspool**: Since the cesspool is a known issue, consider including some language in your listing that reassures buyers this is normal for the area, and perhaps offer to cover some closing costs or provide a credit toward upgrading the system if necessary.

- **Attracting Different Buyers**: Look into alternative financing options such as seller financing for buyers who may not qualify for conventional loans, or market the property more toward cash investors. Airbnb investors could also be interested in this type of property, especially in the Poconos.

### 4. **Timing:**

- **Seasonal Market**: As you’re aware, selling in the winter can be challenging, especially in areas like the Poconos, which may slow down during colder months. If you don't get more traction in the next few weeks, you might want to decide whether it's worth holding and renting out or continuing with a sale at a lower price point.

### 5. **Plan B: Refinancing and Renting**

- If you aren't getting the price you want, refinancing and renting the property could give you time for the market to recover. Since you’re aiming for a minimum sale price of $225,000, if offers aren’t hitting that number, renting could help cover holding costs while preserving your long-term profitability.

### Final Thoughts:

- Consider a modest but impactful price drop to $235,000, which is closer to your minimum acceptable price, and simultaneously address any concerns buyers might have by being proactive with inspections and disclosures (mold, cesspool).

- Don’t hesitate to tweak your marketing strategy or even target alternative buyer groups like cash buyers or investors looking for vacation rentals.

- If you don’t get significant movement within the next few weeks, preparing for a rental strategy might be the safest way to avoid holding onto the property through winter at a loss.

How bad do you want them to move out? Some people will leave because you want to raise it $25 out of principle and the longer it’s empty the longer raising the rent was pointless. If the tenants are long term paying tenants leave them be. You will not last long if you feel you need to squeeze every dime out of every tenant. 

Why ? 

This is a relationship based business from lender to client etc. So I use whomever is the most reliable with the best terms. 

To sell it. Bc buyers can request to skip properties that don’t offer it. 

Then I would really advise against it bc sub2 is not easy and mostly for people who cannot get any mortgage and it’s risky. 
I have a course on creative financing that covers both of these. 
to answer your question, When dealing with **seller financing** and **subject to** deals, the structure of the payments can vary depending on the agreement between you and the seller. Here's how it generally works for both scenarios:

### 1. **Seller Financing:**
In a seller-financed deal, the seller acts as the lender, and you make payments directly to them. Here’s how payments typically break down:

- **Principal and Interest**: This is the amount you pay to the seller based on the agreed-upon loan amount (purchase price) and the interest rate. The loan is often amortized over a set number of years, but the specific terms (e.g., interest-only payments, balloon payments, etc.) depend on your agreement.

- **Property Taxes and Insurance**:
- These payments are usually your responsibility as the buyer. In some cases, you may pay property taxes and insurance directly to the relevant authorities.
- **Escrow Option**: In some seller-financed deals, the seller may require you to pay an **escrow amount** that covers property taxes and homeowner’s insurance. This escrow would be included in your monthly payment to the seller, who then uses the funds to pay taxes and insurance on your behalf. This is similar to how a traditional mortgage works when a bank requires an escrow account.

**Example**: If your seller-financed payment includes an escrow, your total payment might look like this:
- Principal + Interest = $1,000
- Property Taxes + Insurance = $200
- **Total Monthly Payment to Seller** = $1,200

### 2. **Subject To Deals:**
In a **subject to** deal, you take over the seller’s existing mortgage payments, but the mortgage remains in the seller's name. Payments are generally structured as follows:

- **Existing Mortgage Payment**: You make the seller’s mortgage payments directly to their lender. This payment includes:
- **Principal and Interest**: Based on the original loan terms.
- **Escrow for Property Taxes and Insurance** (if applicable): If the seller’s mortgage already has an escrow account, the lender handles the property taxes and insurance, which are included in the monthly mortgage payment.

- **Seller Payments (if applicable)**: If you’ve agreed to pay the seller anything over and above the mortgage balance (such as equity in the property), you’ll make a separate payment to the seller. This could be structured as either a lump sum upfront or monthly payments over time.

**Example**:
- Mortgage payment to lender (P+I+Escrow) = $1,500
- Additional monthly payment to seller = $300
- **Total Monthly Outlay** = $1,800

### Key Points to Consider:
- **Seller Financing**: Payments can be structured with or without escrow. If escrow is not included, you’ll be responsible for paying property taxes and insurance separately.
- **Subject To**: You're responsible for maintaining the original mortgage, including escrowed taxes and insurance if they’re part of the loan. Any additional payments to the seller depend on your agreement.

In both cases, clarity in the agreement is crucial. It’s essential to document who is responsible for what payments and how they will be handled to avoid confusion down the road.

Feel free to ask more questions if you need clarification!

Fix your listing and consider the pricing. 

The best deals are found before the hit any website tbh. I use PropStream and other platforms to find properties under market value. If you are interested in finding off market properties I can show you a few of my methods.