All Forum Posts by: Stephen Chatto

Thanks everyone or you feedback. I am going to negotiate with the bank and see If I can reduce the amount to get current, and then see what the numbers look like from there.

Note: I just realized the wording is confusing. The seller has no money to bring the mortgage current, thus he can not pay to bring it current and then give it to us subject-to.

I have a potential Deal. Couple gets married, it doesn't work out. Husband owns house and mortgage is in his name. He leaves, and the agreement is his wife is to pay the mortgage. Almost two years later he finds out wife hasn't been paying and foreclosure is pending. There are not many comps. It is a small little neighborhood. One comp sold for 97K recently and another listed for 82K for about 4 months ago. This house is nicer than the one on the market for 82K.

Seller wants no money. He wants to return the loan current and give the place to us subject two.

Here is where I am stuck. The amount to bring the loan current is about 15K. After it is brought current the loan Balance is 65K.

This neighborhood will most likely not bring in a person with more than 5K down, and a investor would not pay much more than 60K. But more if we could leave the financing in place and there is just down payment involved. (would do his with the knowledge of seller)

The rents are HIGHER then the mortgage PITI payment by almost $300.

1) I have authorization from the seller to talk to the bank. Is there any way to negotiate the loan with the bank to bring it current for less?

2) How does an investor with authorization talk with the bank? What does that conversation look like?

3) Any Other ideas on deal Structure?

I think there is so much more to a deal then the purchase price! Don't forget about terms.

I have used listsource.com for my absentee owners list. Make sure that you sort the data, there are the ones that have multiple properties and get 5-10 letters from you at the same time :)

I don't think that there is any right answer. I would suggest having something in place to know where your leads are coming in from. Different phone numbers or extensions. And then see what works and doesn't work and adjust accordingly until you find what works in your market.

Also, you are going to rent a car to put up these bandit signs yourself. Sounds like you don't have good access to your market. If a lead comes in you need to rent a car to go look at the property?

That could get real expensive, Would it be more cost effective to find a few wholesalers in the market you are looking to invest in?

Good Luck,

Steve

When selling on a lease option, It works for me either way.

If they can purchase then great, I get my chunk of cash and they get into the home. Win-Win

If they can not close on the purchase, I still get my monthly cash flow, I still get my write offs, and I have tenants who want to own the place and treat it like their own. My Tenant gets to live in the home that they can not yet qualify for and the opportunity to keep doing what they need to do to eventually purchase the property.

I have not had any experience recently with how the banks will look at the down money and option consideration towards down payment money. I personally don't see the down payment money being an issue as much as them getting their credit cleaned up to the point where they can qualify.

At then end of the day if the option consideration is reasonable and the monthly credit is reasonable I don't see it being too much of an issue with documentation.

If you try to say the tenant gave you 20K up front and the entire rent payment goes towards the purchase price they may be concerned.

-Stephen Chatto