Bonded & Insured
Hi guys,
I am new to this but am meeting with sellers. In a meeting last evening, I had the wife tell me I couldn't guarantee the payments to her lender. I asked "why not?" She replied, "What if....this and that" Nothing important. My reply, "I guarantee the payments becuase this is my business. I will, no matter what the cost, make the payment-GUARANTEED.
Then she came at me with "Are you bonded and insured? I said "no, do I need to be? I have never been asked for bonding before and remember I showed you my loan service company information. They (not me) will be collecting and paying, not me. I only garantee the money to be available to make the payment in case the TB doesn't"
She was still not happy or convinced what I was offering was safe. The motivation to use my services are very apparent but in her mind she has hit a major stumbling block.
Any suggestions?
Debi
How about the use of a loan servicing company that reports to them that the payments are made?
Thanks for the reply,
That's a good idea, didn't think of that answer on the spot, now..... how about the bonded and insured question....Anyone have that one come up?
Debi
ncboater,
Thanks for the reply. Here are the details:
FMV: 158000
1st: 114000
PITI: 1090.00
Mkt Rent: 750.00 (Ouch)
No Leins or Judgements, one month behind on PITI. This is all verified.
I came at this one as a LO instead of Sub2. But the delimnia of the market rent for this place has me puzzled. I know I can't cover the PITI. These people are in the mist of a separation and want out, but are willing to stick it out a while yet. I am in a VERY strong sellers market and they know it. During my appointment with them, the realtor showed up with an unannounced showing.
I am sitting back to see what happens, they have my card & brochure.
Let me know your thoughts, thanks.
Debi
Why wouldn't you take it subject 2?
Brenda
bgrossnickle,
They are dead set on recieving as much equity as possible, minus the 9.5% realtor fees.
Your right, because I can't cover the PITI with the market rent being only $750, it is a sub2 deal, right?
How would you approach this one......... please advise.
Thanks so much,
Debi
Bonded and insured is irrelevant in this circumstance. The seller is throwing around words she doesn't understand in an attempt to confuse you. Sounds like it worked.
One other issue, you say you told the seller, "I guarantee the payments becuase this is my business. I will, no matter what the cost, make the payment-GUARANTEED. "
But you admit in your subsequent post, " I know I can't cover the PITI." So the fact of the matter is that the seller is right to be worried. You made them a promise you cannot keep.
commercialking,
I was referring to the PITI amount of $1090 and the market rent for the area being only $750.
I did my due diligence and found that is the most the property will take in rent proceeds. Upside down by $340.00/mo
Sorry for not clarifying,
Debi
she is not motivated enough yet.........kenmax
ncboater, I am going to quote you so I can answer your helpful questions...
>How did you come up with $750/mo?
I went door knocking in the neighborhood. The neighborhood and classified ads indicate a max rent value is $750. And that was stretching it for a 3/1 home without A/C. But we live in the Pacific NW and A/C is only necessary about 20 days out of the year.!
>I think a house worth $150,000 would >rent for more than that. Are you >comparing apples to apples. Are the >bedrooms and baths the same. Are >your comparing rent with a apartment, >duplex or quadraplex?
No, those are much less and we have very few in this smaller bedroom community to Portland.
>The FMV may be $158,000 but what >are they actually selling for in the past >12 months with almost equal sq ft, >beds and baths. Your comps should >be as close to the house your trying to >buy as they can be, if not exact! The >comps and the FMV could be very, very, >different.
>Say the fmv is $158,000 and it took 14 >months to sell it, and the other houses >sold at $149,000 took only 6 months or >less, than I would start at $149,000 or >less to buy . PITI x 12 months -MINUS- >$158,000 would put you there or lower. >Then deduct your 9.5%.
So the way you are figuring this is ......
12 mo * 1090.36 = 13084.00
158K-13084=144915
144915 * 9.5% = Net $131,148
Is this what you would offer??
>Next,
What are you going to do with the property? Buy and hold? Sell or L/O out?
I want to LO for 2+ years to a TB.
>Is this the best house on the street or neighborhood?
No, it is only a 3/1, very small kitchen , dining and family room. It's not a very nice home at all. But it would be a great started for a young couple.
>How about rent ot own in the area what are they getting for rent and how fast are they getting occupied?
I have spoken to several landlords, anything over $800/mo does take some time to get rented. Fortunately for me, no one is working my area as a private RE investor with "rent to own" properties. The ideas and concepts are new to the area.
Thanks for your feed back in advance,
Debi
Well I would probably walk away from this deal because it sounds like it could take a while to rent, plus it looks like you've done your homework on the rent rates. If you can't break even on the PITI amount then I would walk. If it takes you 6 months to rent or L/O this property that will be close to $7,000 that you would have to pay. Go find a better deal and a better seller. Good luck
First the payment. To make it easier to qualify you are going to need that payment of $900 ish plus approximate tax/ insure. If not there is payment shoke that will be factored in to getting qualified.
Next thought is she may be motivated and just not sure what to ask and what to say." I have had people ask if I was a BBB member . No why all they do is settle aguments My business settles them before they get that far." It comes down to trust let her sit for a while call back in 3 weeks.
Best to you,
Sire