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GoldBar-Gary ( owner financing email conversation)

Posted on: Wed, 05/26/2010 - 09:04
GoldBar-Gary ( owner financing email conversation)

I would like to put up an email conversation between myself and the a DGer for the benefit of the group. I hope this is of some use for people. Best of luck to all of you!! Oh, I had to shift this around a bit so it reads in order because when I cut and pasted this it obviously began with my final comments. Again, best of luck!!

initial email to me from DGer:

GoldBar-Gary

rbailey1962 wrote:
I found a house that is listed about half off the value, and the owner is offering financing but I have to submit the offer to him. The property is listed for 19.900 and I want to keep it and rent it out using owner financing can you tell me how to word the offer? thanks

My reply:

GoldBar-Gary wrote:
Sure the best way to do this is first to have a few renters lined up in advance. I would have already had renters in place prior. Do this buy putting on ad on craigslist. Your ad will say, "Great home, great location, perfect for the family, the dog, and YES of course at a great price! Enjoy the comforts of renting a home instead of a cramped and crowded apartment. This one won't last so serious renters please reply IMMEDIATELY." Cut and paste this and put it up on craigslist after reading this to begin the process of pulling in your renters. Add them to your list.

If you have not done this, get your contract to say the "this offer is contingent upon me finding a qualified tenant to rent this property from me, therefore, all I request is that the first monthly payment be postponed for a period of 60 days and then there after, each additional monthly payment will be paid in timely monthly payments until the note is satisified in full."

I use that in the offer. Also once you know what the rent will be, tell your prospective renters that the rent is going (your amount + X) so if you owe the seller say $300 a month for 4 years, then collect a deposit from your renter ( 1st months rent plus an additional $150 security deposit)and tell them the rent is $450. You'll be making positive cash flow of $150 a month plus your note is being paid off buy the renter. Sweet deal right? I thought so. I hope this helps.

Don't forget to place the CL ad NOW. BEST of luck.

DGer's repsonse:

rbailey1962 wrote:
I haven't done this before how to I structure the offer to the owner, do I ask for say 4 or 5 years, and what kind of interest rate should I say, also I don't have anything for a down. Do you know if there is a form already made for this kind of transaction, thanks for your help too! When i looked up the fmv the house is worth double or close to double the asking price. He gave me his phone number so should I make the offer over the phone? I did tell him I wanted to see the property before I made the offer. I'm just not sure how I write it up, is it supposed to be with a purchase agreement? thanks

My reponse:

No problem..... I hope by now you put that ad on CL and are bringning in some potential renters for this property. YOu have never seen the property? You're always supposed to see the property before you committ to anything. Never buy on numbers or emotion. I made that mistake when I bought a house a few years ago because I thought my grandma would be proud of me when I told her I bought a house in her neighborhood. The opposite happened. She told me I was foolish for doing it. She was right, a year later I dumped the house and took over a 50% hit on it. Oh well, lesson learned I guess.

RE: The offer.

Okay here's how it goes. Since he has the house, it's his game and his rules unfortunetly. It's no different than filing for a bank loan... You apply for a loan then the bank comes up with the paperwork, the percent amount, terms, monthly payments etc.... This is no different here. The seller will have all the paperwork and will come up with the terms, NOT you. Since you don't have any d.p. money, tell him upfront that you don't but you want to buy the property. Then tell him that you don't mind having him charge you a higher percentage rate because you don't have d.p. money but only if he has an issue with you not having the d.p. money.

All the terms are his choice so don't worry about what to put in it because when you got a car loan who made up the terms? Not you, the bank did. Just go for. I hope that helps... Also, it's best to put stuff up like this on an open active forum so that others can benefit from it plus others can add their piece to it and it also frees up my time. Not that I dont mind replying to people because I love it, it's just that very busy and I get hundreds of emails daily. I hope you understand....

Again, best of luck, go for it... And negotiate your tail off until you get what you want. You'll do great in this business. Read dean's books too if you haven't already. Best of luck.

GoldBar-Gary

__________________

Gary Rabatin
Certified Cash Flow Consultant
Founder & President of Gold Bar Funding Group L.L.C.
Private Real Estate Investor
"Building Wealth by the Numbers"


Posted on: Wed, 05/26/2010 - 19:35 #1
FYI

This was not edited so if they are major mistakes such as spelling, punctutation and grammar, I apologize in advance. ENJOY!

__________________

Gary Rabatin
Certified Cash Flow Consultant
Founder & President of Gold Bar Funding Group L.L.C.
Private Real Estate Investor
"Building Wealth by the Numbers"