All Forum Posts by: Lee Judd

@Larry Lee

I agree with Chris and David. Make a counter offer to your buyer on terms you like. No reason you shouldn't get price you want and work for the buyer. I have gotten 8.5% interest on the two I sold like that and got market price or higher because I am willing to owner finance. Get financials from your buyer and do as much underwriting on them as you can. You are the bank now. See what their debt to income ratio is. I would want it under 40% at least.

Hey @Mark D. I have borrowed money from family and just use a note and a mortgage or deed of trust. There are some rules on the minimum interest rate with the IRS so check that out. Treat and document it like a loan and there shouldn't be any tax issues but always talk to accountant first. 

I was also told recently by my CPA that you can't over pay on interest to family. (Ex borrowing money from my kids to boost their saving accounts) The rate needs to be reasonable. Can you go borrow at that rate elsewhere? If so than it is a reasonable rate to pay to family. 

Hey Robert it doesn't seem like your closing cost are high enough and I would assume that you would have fees for the refi as well as the purchase loan. I didn't see any insurance in your expenses and would assume that you would have vacancy higher than 5% pre-renovation. If your other number are accurate than it looks like you would have good equity in the deal and cash flow nicely with you cash back in your pocket. Good luck.

Go for it. Tenants will more than make your payment and you can save up for the next investment.

@Jasmine W. You should be able to get that kind of rate on your home purchase as well. If you sell you have to be able to replace the rental and buy the house with the equity. If you can do that than it it might be worth it.

@Nicole White Make them a 3rd offer for all their properties or as much as you can swing. They might be willing to let a bunch go at once rather than one at a time. Less hassle and you can help them with it.

Also you can remind them how little us bankers are paying on money deposited right now. 😀

Remember that your closing cost should be less with seller financing. No need for appraisals, bank fees etc. You can pay the same rate the bank would charge you and you are money ahead. Get terms that work for you and you can pay a higher rate. Be creative.

@Nicole White I have used the two option strategy a couple time and it has worked well. Give them the specific prices and terms you will give them if the owner finance and then a cash offer. My last seller went with the cash offer even though it was $25k less than the owner finance offer of $150k.

@Paul Ricci Jr yes but if you capture the appreciation tax free it makes sense to me to take advantage of it and expand into multiple properties.

@Rick Martin what are some ways you guys go about doing that? Can you do that same thing in smaller complexes? Thanks

@Paul Ricci Jr the one advantage you have with your situations would be the tax free capital if you do sell. Which you choose would depend on you goals. Cash out won't give you as much cash to reinvest buy you maintain that property.