OfflineOne of my bird dogs called and said he got a call on one of his yard signs from a couple that wanted to sell for what they owed. I called the lady and she told me they owed 210K for this 5/2 2story ranch house on 1 acre. I sent the bird dog back over to take photos and access the condition. He said it needed 20K in work, deck boards rotted, Patio leaning, needed paint and yard was dead and overgrown, the pool had green water with frogs. The worst part is it was out in the country near a migrant farm town. I valued the property 70K less than what was owed less repairs. The payments were $1400 PITI. I told the seller the only way I cud sell this property is with a long term lease option that wud run the term of the loan. She agreed. After several weeks of advertising nobody was buying, plenty of calls and many people looking it over. I called the seller and told her she needs to at least paint the place and clean up the yards. She said I will just rent it. Another week went by and the seller calls and says shes willing to lower the payments $400 for 1 year and make up the difference out of her pocket. I also reduced my assignment fee from 10K to $7,000 It didn't take long to find a young couple that had horses and loved the property. They only had $6,000 so I carried a note for the 1K for 30 days. It was a nice payday, the bird dog got $2500 and I got $3500 and another $1,000 in 30 days.
The bird dog was a little angry cuz I never seen the house, or met the sellers or buyers, he found the place, showed the house 20 times, took my contracts to the seller to sign, and the buyers, went to the Notary with them, cashed the check and drove 75 miles to bring me my $3500 in Cash. All I did was figure out how to make the deal work, negotiated with the seller and drew up the contracts. I think he realized how easy it was. The deal took about 5 weeks and I figure I spent just a few hrs in emails & phone calls. My thinking is, why force the buyers to refinance in a few years? So, this is my new strategy, I'm starting to think I can sell anything. Rando1
Rando
I don't know what to say, but that's great for you. and I didn't know will take that long to close a deal.
Be happy and go healthy ^_^
Ling and/or Dustin
I was starting to wonder if that house would ever sell, almost gave up a few times, but once we found a buyer we had our money with in a few days. I also did a subject to deal that took 4 months cuz the seller was demanding $6,000 and he was underwater 20K The house was also in an undesirable area. My buyer only had $6500, finally I got the seller to agree to accept 4K now and 2K in 6 months, I made $2500 on that deal, I had given up several times on this deal. I did another subto deal in 3 days and another in a week and a half, and the reason it took that long is cuz the renter wasnt cooperating to show the house. I told my potential buyer to come back next week so I can show u the inside. He says were from out of town, we seen the outside, we like the house, I got cash in my pocket. I said come on over. He pulled out an old sock with $8,000 in cash all in 20 dollar bills. The assignment fee was $15K and he agreed to pay the balance of 7K in 2 yrs. That house was 60K underwater, but was only 5 yrs old with a half acre.
Rando
This is a great example of creativity and finding a solution. You mention your bird dog was upset because they did most of the work. Just goes to show you that it's not hard work. It is a combination of persistence and knowledge that gets deals done.
Great job!
Chris
"Faith is the eternal elixir which gives life, power, and action to the impulse of thought.
"Faith is the starting point of all accumulation of riches!"
- Napoleon Hill, Think and Grow Rich
Would you mind sharing some of how you are setting up those lease option deals?
I don't understand first why some one would take a LO when the property is upside down 20K. Second thing, are you just putting the buyer and seller together and walking away from the deal with the down money? Or are in a sandwich LO position with the seller and your LO buyer?
I'm just trying to understand how you are putting these together, because they are amazing, and you could do this over and over, there are tons of upside down people and to present an option like what you are doing is amazing.
Great job.
Let me know
Thanks
MiKessler
I always say Keep Moving Forward! Never Give Up On Your Dreams!
As Matt Larsen says "Feed the Need" - Edge 2013
Follow my daily investing journal and read about the deals I've done and am working on at:
http://www.deangraziosi.com/real-estate-forums/investing-journals/117493...
Well this was my first one, but I thought why force the buyers to refinance in 1-3 yrs, if the sellers are underwater and want out of the property I will just make the lease go to the end of the term. Then the Title will transfer to the new buyers. I believe this will produce a much better success rate. If the seller insists on a shorter term and the buyers are agreeable I can do that also. My buyers didn't have good credit, they cudnt qualify for a bank loan. A lease option is probably the only way they can buy a house. I have another deal Im working on, seller owes 108K current value is about 90K Payments are only $730 I can add 20K to the price and $200 a month cash flow for me. I can stay in the middle. Or I can just keep it and rent it for $975 Except vacancies and clean up and repairs are something I dont want to deal with. Rando1
Rando
Congratulations Rando1! Keep up the good work! That first deal is always the hardest but you are doing it and well on your way to more success! Each deal will be different and sometimes we need to get creative. You are doing great!
KEEP MOVING FORWARD
"If it is important to you, you will find a way. If not, you'll find an excuse."
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