Good Deal Need Help
Lease option is not my thing YET.
While I was at the court house researching tax liens this guy started talking to me and asked what I was doing I told him and he asked if I also buy and rented/leased houses I told him it depends on the deal, thinking to myself I have not made it that far yet in my studies in this area but I would listen, he then told me about his friend who was a contractor who was building 200,000 dollars houses and that the bank foreclosed on him the bank finished the last house he was working on and now it was up for sale for 88,000 I thought this can't be true a brand new house that sells for 200,000 being sold for only the banks interest of 88,000 I checked it out and the deal is real he wants me to buy the house and lease it from me for no money down he said his down payment was telling me about the house ok no problem he is willing to sign a lease for 5 years with the option to buy, my question is my debt to income ratio is way off that’s why I started with tax liens first to correct this problem how can I close this deal with the bank if I could get the bank to give me the loan and take the mortgage to 160,000 it would totally eliminate my debt the renter said he is happy with this and would be willing to do the deal he wants the house and is willing to pay the 160,000 for it. he would be happy I would be happy so how do we make the bank happy. any ideas thanks
[ Edited by Mysticreality on Date 12/07/2003 ]
Check you shill out with care. Find if he is for real and can he afford the payments on the house? Is he really moving in or trying a flip. If it checks out you need a hard money lender to back your action. With all that in line, then you go for loan your hard money lender is the co-sign. build that relationship.
Lucius
I agree check and make sure he is not
scamming you
Ok to touch back on this one.
The guy was not really trying to scam me he just wants in a big house with no money down. BUT I was not the only person he talked to about this house, as I was at the bank waiting my turn to talk to the lady about the house I saw the guy who told me about the house talking to a lady, when he saw me he left in a hurry I was thinking man that was rude, then the lady came over to where I was waiting and we started talking and it turns out he made the same offer to her for the house, but she was smart enough to get him in a contract to lease the house from her, so thinking I really need to get this house I got to talk to the lady at the bank first we talked for about thirty minutes and I persuaded her to hold the house for 15 business days for ten dollars while I looked for financing that would let me roll my debt into the house and rent it out.
She told me that because they have all of the paperwork on the house and that my credit score is high enough for them she would let me roll my debt into it but I would have to live in it for a year before I could lease it out. she knew that I was nervous and that I really had no freaking idea what I was doing but she played along and is willing to give conventional financing as long as I live there.
So that’s where I am at now.
It looks like I will be moving to the BIG City I’m going to miss country life. but hey I'm going to be debt free. and while I’m living in the city I might as well rent out my place in the country as it too will be free and clear.
Does this count as a no money down deal?
Well I posted to soon just as I hit the post button the phone rang the bank that has the house said that they was unable to let me roll my debt into the house and that my debt to income ratio was way off to handle the payments on the house so now I'm stuck I guess I could try my bank and see if they will work with me I will be back gone to call the bank and set up an appointment to see the loan officer.
Well, how disappointing. Yes, call your bank. Obviously after your loan, you won't have a debt ratio issue, so hopefully they will work with you.
Keep trying, sounds like a great situation.
Good Luck !
[addsig]
Start with your local banks. Bring in financial statements and a something on paper to explain your plan with this property. I might be tempted to sell the property contract for deed. If you plan to hold it, say you plan to rent it out.
Convince them to use your LTV $88/200k is 44%! Keep trying, this seems like too good of deal to pass up.
On the other side....check comps...go look at the property. Is it really worth 200 or maybe 120?
GOOD LUCK
If you come up with a contract to rent or lease the property this will be used to show income and should bring up your debt to income level, consider a equity line of credit as a second mortgage to pay off bills.
Ok to give an update to this I worked out a rather interesting deal. I had to go to plan C.
After my bank contacted the other bank to get all the info on the house the first bank wanted to deal with me I guess I was worth there time after all any way after bouncing back and forth between banks I ended up giving the house to my neighbor we was setting around talking and his wife mentioned she wanted to move to the city so after some discussion we traded properties he owned his free and clear and said that for the big difference in equity he would take 15,000 for his well that was a no brainier for me I let him have the one in the city and I took his house next door to mine he is doing it owner finance at 300 a month and is willing to wait till I get a renter before I have to make my first payment he said because it was winter that it would be to hard to rent any thing out so I can wait till spring before I have to start looking for a renter plus I think he really don't want to move till then but that’s ok with me thanks again for all who sent me a private message offering to help and for the advice it really helped.
Way to go! That's the way to back yourself into wheeling and dealing!
[addsig]
Very cool story. Could they all be so innocent and turn out so clean? Ahh. Warms the heart good. Indeed, backing yourself into wheeling and dealing!
noel
[addsig]
Maybe I'm too cynical, or inexperienced, but the only thing I could ever convince a neighbor to do was not to have their dog crap on my lawn, lest swap houses, and wait till I got a renter to pay.
Good for you buddy. Are people really more friendly in OK? Go Sooners I guess!
Well you have to look at it this way we have been friends for about 10 years and have helped each other out many times and adding a good meal and after dinner drinks to the conversation doesn't hurt. plus his daughter is starting college soon and his wife wants to be closer so she can come home on weekends and holidays and it was more about his wife wanting to move to the city than him, and if you knew his wife you would know she generally gets what she wants so I will confess I played that angle.
Good Job. It helps for others to know what business you are in.
Don't forget the HML. If the equity is there, then the ratio's really don't matter.
Always remember, they are there to make money, however, we can make money with them.
Once the house is yours, then the banks would easily refi. I find it much easier to refi than to purchase.
Most of my deals have been either seller finance til balloon, then HML to get title in my name, then refi with bank. Thus far, I haven't got to the third part yet as I end up rolling everything into another purchase and renting/leasing the property to pay the notes.