Low Equity Deals
My last 4 calls have been from semi-motivated sellers. I am at a loss at what to offer these people. This guy calls today with 3 properties, 1 2 family and two single families. He is not behind in payments, but he has little equity. I asked what his payoff amounts were and he said "make an offer first." Sounds like non-motivation right.
THen he says he had 2 of them listed for 6 months with no luck. He said he wants to move and be completely done with the rental game, even though 2 of them cash flow nicely. He also said he justs wants to sell and not have any money come out of his pockets. That sounds like motivation so I say "are you open to anything along the lines of a land contract or something similar". He said "yes but I have little equity so how would that work. Well, thats when I get stupid and sorta change the subject. I dont know how that could work, I just want to see if he is open to creative ideas.
What can I offer to someone like this? I dont want to puch sub2 since he is current. I dont know if a low cash offer would appeal since he owes what they appraise at. Are these considered tire kickers that I should just thank for calling and move on?
just because he is not behind, does not mean you can't buy subject 2....I would prefer them not to be behind.
Really? How do you pitch that idea? I thought someone would have to be highly motivated to go for that.
Why wouldn't a Sub2 work? If he isn't behind on payments that means less for you to come up with to take over his existing financing. If he is admitting there is little equity, then he knows he not going to get a lot of cash out, why wouldn't he want to do a Sub2? Would you want to do a sub? Are the properties in good condition? What are the numbers on the property, asking price, repairs, etc? Are you thinking you can't short sale because he isn't behind?[ Edited by iamhappy on Date 01/20/2004 ]
The properties need some work but yes I dont think I could short because they are not behind. he was asking 76k, 62k, 77k when listed. He said minor repairs is all they all need. Keep in mind I have not seen them. I just took the call this morning.
If he just wants to get rid of the property see if you can get his mortgage company to have you assume the loan.
Bill,
Just in case you didn't see this.
http://www.thecreativeinvestor.com/modules.php?mop=modload&name=Forum&file=viewtopic&topic=19639&forum=34
Tinman,
why assume a loan when you don't have to? Even if there was some strange reason why you did an assumptions, the orginal note borrower isn't totally off the hook. I would take over sub 2 and give them some moving money.
NebulousD is K-Rekt!!!
billfaith---
Why not just go to the tenants and ask if they'd like to 'co-own' the property WITH YOU??
Tell em No Big Down, No Credit Check, or Bank Qualifying!!!
And monthly Pymt only increases about $75 to $100 a month MAYBE???
If the balk ask them if the know of anyone with the (amount) needed who'd like to own the UNIT next-door or Upstairs, etc?
Just review your #s so that the deal makes sense
Also get Mr. Seller's permission B4 talking to the Tenants.
I have TWO ARTICLES here on TCI you should read and review.
The First One SEARCH TCI:
"How to Legally CONDO without Re-Zoning"
and the Second One SEARCH TCI:
"8 Reasons You Should Buy Over-Financed Properties"
both by Derrick Ali
I hope this Helps!
Derrick
Derrick
I cant find those. Do you have a link?
nebulousd
Do you guys say anything differently to someone not behind than someone who is? I will find out if this guy is willing to sell sub2 but any suggestions on how to present would be great
BF:
here they are:
Legally Condominium-izing your 2, 3 or 4 unit Without re-Zoning?
http://www.thecreativeinvestor.com/modules.php?name=News&file=article&sid=189
8 Reasons to Buy Over-Financed Properties
http://www.thecreativeinvestor.com/modules.php?name=News&file=article&sid=129
Bill,
Not to be a smart a$$ but John Locke provides a great course and tells you exactly what to say to a seller. All that I would be telling would come straight from that course. If you are serious about buying sub to, you may want to think about investing in his manual or course.