All Forum Posts by: Scott Wolf

@Ryan Copeland, when someone asks for an offer letter, or letter of intent LOI, I give them a basic one outlining price, downpayment, contingencies, due diligence period etc. I make sure to include the following at the end, so they know it's not legally binding (which nothing usually is until a contract is signed, but we live in a litigious society so....

"This Letter of Intent is intended as an outline of the general provisions of a Purchase and Sale Agreement and further intended to facilitate further negotiations that will lead to a mutually acceptable Purchase and Sale Agreement that will be executed by all parties concerned. This letter is not, nor is it intended to be, a legally enforceable and/or binding agreement by either party. A binding agreement is subject, among other things, to the successful negotiation and execution by the duly authorized representatives of both parties of a fully integrated Purchase and Sale Agreement."

If you're speaking with banks, you should speak with a mortgage broker.  They can do all the heavy lifting for you.  Unless you want to call the 5 smallest banks/credit unions around you.

@Christopher Abernathy, to play devil's advocate to @Patrick Britton, if the homes in that area are all priced accordingly, there must be a local bank that lends in that price range.  I'd call the surrounding local banks and credit unions and find out.

This is all over the place.  Not sure why/where the $290k or $400k sales price comes from if the property is worth $700k.

Not sure where you got the $150k for a stepped up basis. If he passes away and your mother-in-law and her brother inherit it, they would get a stepped up basis to today's value.  So essentially the $700k.  If they put it on the market, and sell it after he passes they would pay no tax on the sale of the property due to the stepped up basis. 

If he wants no responsibility in the property, you should speak with a CPA and tax attorney in MI. Perhaps him giving you a loan with seller financing so it's a monthly payment to him could work. Additionally, he could 1031 into a NNN property that gets him a monthly payment with no LL responsibility(which would also pass to his heirs upon his passing, and eliminate the tax liability if they choose to sell within a year of his passing). Happy to discuss further if you'd like.

@Amita M. although on second look, they're owned by Realogy(parent company of Corcoran, Century 23, Coldwell Banker and more) so they're probably legit.

@Amita M. Based on the fact that they're not on the NJ Land Title Association website, I'd say not a great sign.

@Martha Daisley, if he wants an interest only loan, there is no amortization.  You're correct about the calculation

8.5% * 45,000 = 3,825. Monthly becomes $3,825/12=318.75 * 6 = $1,912.50

So $1,912.50 would be what you make on the loan.  Most private lenders get better rates(10% or more), and especially for such a low amount.

Once again, make sure your position is protected by a mortgage note, lien and title insurance.  Happy to discuss further if you'd like.

@Martha Daisley, I'm currently looking into private lending, but as someone who is pretty risk averse, I wouldn't lend on a deal where I don't have first lien position secured by the property and title insurance.

@Hayden Obrien, check out Richard Bayer from Einbinder & Dunn LLP. Let him know I sent you. https://www.ed-lawfirm.com/tea...

@Sarah Giffin, have you asked your bank about a personal loan? Or a HELOC on properties you own, or if you have a stock investment account, many of the offer Lines Of Credit against your holdings as well.