Motivated Sellers
Hi,
I am looking at using sandwich L/O's as a method of property investing.
I can understand the benifits for the Tenant buyer and myself as an investor but I am having a little trouble understanding why someone would give me control of their property for a period of time.
I would want the money from the sale of my property as quick as possible if I was the owner.
What are the benefits or what motivates a property owner to enter into a sandwhich L/O arrangement?
PA
Motivation is the key. You may want to cash out of your house quickly, but some people just need debt relief due to lay offs, divorce, two mortgage payments. They are motivated to have their house sold in time, and are looking for a solution. The LO gives them the debt relief while still maintaining ownership on the property they have a loan on (subject to gives you ownership on their property while they keep the loan in their name).
Quickly: I just signed a LO with someone who couldn't sell for 2 months and was making 2 house payments - he actually called me for 2 weeks and refinanced his house so I had a lower monthly payment. He was motivated to stop the bleeding.
Hi Sentrix,
Thanks for the reply.
I am assuming that these people who now have debt relief are aware that they have effectively sold their house. The actual sale completing maybe two years from now.
Also, how does this arrangement effect the owners ability to obtain finance to purchase a diffent house given there are now TB 's living in the house just sold?
or
what are the owners options in finding alternate residence (obviously renting is one) once they have agreed to sell their home on L/O basis
PA
Quote:
On 2003-07-17 20:56, pa wrote:
Hi Sentrix,
Thanks for the reply.
I am assuming that these people who now have debt relief are aware that they have effectively sold their house. The actual sale completing maybe two years from now.
Answer: When I am trying to take control of a house via LO I stress the fact that my intent is to sell their home as quick as possible - I tell them that is how I get paid. I also make them aware that, in fact, the house may not sell and they *may get it back after 1 year. With this method I try to extend my terms on the LO to 6 years (1 year increments). By planting the bug that they may get the house back I get more control over the property. This is also when I talk to them about selling me the house subject to, which would also keep the loan in their name, but now I own the house, and am responsible for the property forever, 100%.
Also, how does this arrangement effect the owners ability to obtain finance to purchase a diffent house given there are now TB 's living in the house just sold?
or
what are the owners options in finding alternate residence (obviously renting is one) once they have agreed to sell their home on L/O basis
By producing the lease agreement a lender will give them 75% of the monthly payment being made on their home as income torwards what they can afford for a new loan. If I take their house on land contract, they can get close to 100% of the monthly payment applied torwards their income (with subject to this gets a little trickier).
PA
Hope this helps!
Sentrex (or as you call me, sintrex )