All Forum Posts by: Jim Sakalis

George, First of all thanks for sharing your story.  That is kind of an open ended question you are asking.  Without knowing all the numbers involved one could not say.

In general, borrowing money at great interest rates is not a bad way to go.  You just have to keep in mind all the holding cost you will have while each month.

Do your homework on the kind of money you can receive each month, subtract all your expenses and see what is left.  If what is left gets you excited than go for it.

Good luck, Jim

The short answer is YES!! Mike, just make sure you treat it like a listing agreement so you have permission to advertise it. Good job!!

Jim

Belinda,

I'm not even going to comment on J. Scott's remark.  All I can tell you is what we have had success with doing without the use of a realtor as we buy and sell in all 50 states.  When you are able to offer the types of terms that we do buyers come to us directly.  Being a past Broker/Owner of a company I know first hand there are so many realtors out there that have never heard of or know the first thing about lease purchasing, owner financing,etc which is really sad.  

Now, to answer your question about the 100% financing; You would have to put up your down payment to satisfy the mortgage lender, but we would structure the contract so that you would get that amount or more back in repair cost, etc.  Surprisingly enough they do not consider it a kick back provided it is disclosed on the hud 1 settlement statement. 

I hope that helps you. Jim

@ 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,

Victor,

Another place you can find current property values is at your local county court house or tax record search which is also public record.

Good luck, Jim

Michael,

Thanks for the tips. I will check that site out as well.

Jim

Walter,I'm thinking you are referring to

Search engine optimization

Which i have in place and continue to build.

Thanks

I'm sorry I do not know what SEO is. I will check out the links as well.

Thanks, Jim

Mike,

Thanks for your inquiry and question.  Well private money is one way, but I never do that since it cost too much money.

It's actually done by finding a property that already has equity in it and structuring the deal around it.  For example; Let's say you were going to purchase a home for $200,000 and the property is really worth 280k.  Your goal here is to increase your sales price so you can receive money back at closing.  In a lot of states you can actually get money back at closing as a buyer and it not be considered a kick back.  ( Georgia being one of those states).  If you are in one of those states that looks at it as a kick back than just structure the contract that you are going to receive these funds for upgrades, etc. So if you want to get your 10-15% back than you use a formula that increases the loan amount and then you receive your funds back.  What you end up doing is borrowing from the existing loan at that same interest rate.  It is just like a cash out refinance.

If you ever want to purchase a property through us we can structure it for you.

Huy,  Thanks for the education as well as sharing your story. In my experience I have never been a fan of putting a down payment down when obtaining a loan.  The main reason is, that money in your case was $18,000 just sitting there making very little money for you.  You had to end up creating another loan at 7% rate.  You basically ended up borrowing your own money back and paying someone a 7% rate for borrowing your own money back.  That is just not right.

Had you been more creative in your purchase you would have been able to do 100% financing ( yes even on an investment home). Then keep that money for what you call for emergency.

In addition, look at all the time and effort you spent chasing down and convincing someone your home was worth more so you could borrow your own money back.  That is crazy.

Rather than continue looking to do that again, instead be more creative and buy at 100% financing.  There are creative ways to do it and would love to share with you.  It does not matter what state you are in or how many properties you already own.  I have had over 27 mortgages at one time and I never had to put a down payment.  Well, let me reword that; I put the money down and the received it back at closing which created 100% financing.

I hope that helped and that you don't make that same mistake again.

Just keep in mind just in case you are wondering, " for every $10,000 you put as a down payment you are only saving an average of $100.00 a month on a mortgage payment.  If you can take that same $10,000 and invest it into something else that will generate you more than $100 per month ( which most people can) than keep your money in your pocket.