All Forum Posts by: Josh Caldwell

Yes, your lawyer can draw this up for you.  I am sure there are multiple ways to handle this but I would have two documents. One, as a contract to buy the property, which will be converted into a note and mortgage, and a second doc that would be a lease with the seller.  That lease would match the payment on the mortgage or more if I could get him to agree to it. I would use rentometer to set that price.  the lease would auto renew for as many years as he lived, if I understood your deal correctly.  You wouldnt get much if any cash flow, and you would need to build in some extra rent to cover repairs, but in the end you would get a portion of the mortgage paid for by the seller/tenant.

This isn't really a TX question. This is a local municipality question. Reach out to your local municipality, code enforcement, or building permits office. They should be able to answer your question. 

I would also want to talk to a GC and get a feel for cost, so that I can make an informed decision about cost vs reward of this undertaking. 

This is a fun question. The bank is going to have to agree to any sale of the property that they are using as security for a loan. There are  a couple of ways that you might be able to work around this. 

You will need to tag a local real estate lawyer in early in this process. 

1 consider having the seller refi.  This will pay off the current mortgage, and the new bank can hold a mortgage on the smaller property, assuming that he can find a bank to lend him money

2 consider taking and recording an option on the land.  This will secure rights to the land for you.  It will also give you the ability to close on the land once the original mortgage is satisfied. 

Lawyers get paid by the billable hour. If they don't see a problem then they have nothing to bill you for. It is likely that one of these lawyers is trying to milk one of you. How about, you and your partner find a 3rd attorney to draft the document. If you cant agree on a lawyer, you might not survive as partners. 

I honestly have no info on this subject, but I am sure that you don't need a bank.   I know a number of foreign investors, Canada included who use owner finance as a work around.  Simply put, you just buy the property directly from the seller.  You offer to pay them X per month for Y months.  Once you have the title to a property, it is much easier to refinance after some seasoning. 

A lot of sellers will accept this type of offer. These sellers are likely to be off market (you have to look for them) and they are usually non owner occupied.  You can buy a list of these properties from list brokers. The lists are pretty cheap 30 cents per lead or less. 

The mechanics of the deal are pretty simple and most real estate lawyers can handle that for you. 

To your success

Josh 

I like where you are at the moment, but why wait, and why would you want to use your own money?  How about this, start looking in your target area for a burnt out landlord.  You can find them by calling for rent ads, and asking "hey, do you want to sell"  Landlords in general like getting monthly payments, so your pitch is pretty simple.  What if you could have the monthly income without the joy of dealing with tenants and toilets?  If they like that idea, then the only negotiation is the monthly payment. 

There are a host of reasons why landlords will burn out. It can be difficult tenants, repairs they are unprepared for. or even problems in their own life (divorce, illness, age, or moving to another town)  

Conserve your cash, and buy something now. 

First thing is first, you need to take care of the agent.  Just ask the agent what he/she wants?  You will need to add that to your sales price.  Secondly, and this is important. NEVER tell anyone about a property until you have it under contract. You cant legally market a property unless you have an equitable interest (under contract) and you run the risk of having some dirt bag go around you and steal your deal. 

If you are using traditional financing, the bank wont approve the loan with knob and tube.  It is considered a fire hazard.  This leaves you with two options.  You can either have the seller pay to repair this prior to closing, or MUCH BETTER, you can use this new discovery, to negotiate owner financing, so NO BANK in America will approve a loan on this property. 

I have a couple of ideas for you. Look for an obituary for the dead person. They usually list living relatives.  Also, in some states (my state of PA) there is a legal process that will allow people to claim property through the courts when there is no living owner or known descendant.  You might have to find a local lawyer who deals in probates. I would also try to ask the neighbors if they know of any relatives.  

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