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(the shotguns)
 
berettafan's Avatar
 
Join Date: Feb 2006
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Quote:
Originally Posted by drcoastline View Post
How do you know the house is over priced? You don't know the price, the market, length of time on the market. No way to tell from the original post. For all you know house is undervalued potential buyer sees a deal and makes what looks like to an unknowing seller a full price and earn some interest. House may have been on the market one day and this is the first offer by a savvy investor trying to grab it.


if it were priced at FMV OP would have offers that don't ask him to hold a 30% note at barely over going rates.

private money, which is what the buyer is seeking, starts at 10% these days. And typically only on a first mortgage at that!
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Old 03-13-2018, 06:19 AM
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No Way. You are second position to the bank.

At the sheriff sale you will lose out.
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Old 03-13-2018, 06:21 AM
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There's no way the buyer could slide the "30% down" theory past a lender, as they're certain to require him to prove his source of funds. Unless of course, he has a buddy in the industry who's willing to help him commit load fraud ... you know, FBI-level stuff.

Unless you really need to sell immediately, wait for a real buyer. And unless you're very savvy, hire a good agent to help you navigate the often tricky waters of a real estate transaction. Yup, you'll pay the dreaded commission, but if the market in your area is at all robust you'll probably net more on your home with a good agent representing you than you will going it alone.

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Old 03-13-2018, 06:47 AM
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Quote:
Originally Posted by berettafan View Post
if it were priced at FMV OP would have offers that don't ask him to hold a 30% note at barely over going rates.

private money, which is what the buyer is seeking, starts at 10% these days. And typically only on a first mortgage at that!
Again Beretta, he may have other offers we don't know. He may have offers of 90% of FMV conventional financing. 80% of FMV cash in addition to his question we don't know.

The buyer is throwing out rates that to someone that is not savvy in RE investing may look good. I will give you your full price. What I ask in return is hold a second mortgage at 6% interest for two years. If you put the money in the bank you will only earn .03% I'm giving you 6%. Plus your secure buy having a lien against the property. Looks to be a decent return on your money if you don't know the risk and pit falls of foreclosure. I agree private money is higher but as the investor making the offer I am not going to start my offer at 10%. I'll start at 5% maybe I get lucky and get 8%.

As an investor that works both sides of this I currently have a commercial loan private paper $220K @ 6% fifteen year term no early buy out on a property with a FMV of $330K. So from the buyers side I see what he is doing. What I don't know is the purchase price to FMV. Seems to me the buyer will increase the interest a little bit to get him to bite. Pay a few months and then default. He will then force Vipergrun to foreclose or renegotiate. It will be far more costly for Vipergrun to foreclose than the buyer to defend. Plus buyer has no skin in the game. He walks if he doesn't get what he wants.

Last edited by drcoastline; 03-13-2018 at 07:05 AM..
Old 03-13-2018, 06:57 AM
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used home salemen charge 5-6% on 700k that is 35k or a decent 911 money
in my opinion way too much to sell a home
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Old 03-13-2018, 06:59 AM
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Quote:
Originally Posted by Norm K View Post
There's no way the buyer could slide the "30% down" theory past a lender, as they're certain to require him to prove his source of funds. Unless of course, he has a buddy in the industry who's willing to help him commit load fraud ... you know, FBI-level stuff.

Unless you really need to sell immediately, wait for a real buyer. And unless you're very savvy, hire a good agent to help you navigate the often tricky waters of a real estate transaction. Yup, you'll pay the dreaded commission, but if the market in your area is at all robust you'll probably net more on your home with a good agent representing you than you will going it alone.

_
I hate to give any of them business but hire a good RE attorney to do the contract and no attorney review.
Old 03-13-2018, 06:59 AM
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I sold a rental house years ago. The transaction was totally goofed up. At the signing, it became obvious that I needed to carry a note or it wouldn't sell. I did reluctantly.

I guess I would again if needed. I felt nervous the entire time with that note!

Good luck.
Old 03-13-2018, 07:02 AM
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(the shotguns)
 
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Quote:
Originally Posted by drcoastline View Post
Again Beretta, he may have other offers we don't know. He may have offers of 90% of FMV conventional financing. 80% of FMV cash in addition to his question we don't know.

The buyer is throwing out rates that to someone that is not savvy in RE investing may look good. I will give you your full price. What I ask in return is hold a second mortgage at 6% interest for two years. If you put the money in the bank you will only earn .03% I'm giving you 6%. Plus your secure buy having a lien against the property. Looks to be a decent return on your money if you don't know the risk and pit falls of foreclosure. I agree private money is higher but as the investor making the offer I am not going to start my offer at 10%. I'll start at 5% maybe I get lucky and get 8%.

As an investor that works both sides of this I currently have a commercial loan private paper $220K @ 6% fifteen year term no early buy out on a property with a FMV of $330K. So from the buyers side I see what he is doing. What I don't know is the purchase price to FMV. Seems to me the buyer will increase the interest a little bit to get him to bite. Pay a few months and then default. He will then force Vipergrun to foreclose or renegotiate. It will be far more costly for Vipergrun to foreclose than the buyer to defend. Plus buyer has no skin in the game. He walks if he doesn't get what he wants.

not trying to be argumentative but you've made my point.

house is over priced (see first bold section)

why would anyone consider holding paper at 6% as a second when they could have all the money now? no reasonable person would do so.

the 5% is to compensate for risk (see second bold section-you call it buyer having skin in the game but same result)
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Well i had #6 adjusted perfectly but then just before i tightened it a butterfly in Zimbabwe farted and now i have to start all over again!
I believe we all make mistakes but I will not validate your poor choices and/or perversions and subsidize the results your actions.

Last edited by berettafan; 03-13-2018 at 07:14 AM..
Old 03-13-2018, 07:12 AM
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A bank will always want to verify source of funds, even seasoned funds, for a down payment. But that doesn't mean you can't get a loan for those funds. You just have to have an equal amount liquid to show seasoned funds. Plenty of folks can document this, but then get them from elsewhere when it comes time to send them to the title company. I have twice used gift letters from family for my down payment, while privately and verbally agreeing to repay those "gifts" as soon as my other house sold. Bank just wanted to know that I wasn't borrowing to get in and thus increasing my debt/income ratios.
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Old 03-13-2018, 07:39 AM
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Not sure if an attorney is required at closing. NY it is, TX it's not so YMMV.

I had a similar deal on the table a bunch of years back. Did not require me to hold a note but buyer was playing shenanigans with their financing.

My attorney explained to me what they were up to then told me if I wanted to proceed to find another lawyer.
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Old 03-13-2018, 07:53 AM
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Wow, as always, great information from you all!

Yeah, I am not thinking it's a deal I want to do. The prospective buyer works for a lender, so I guess they have access to packages mortal men do not.

Perhaps if I raise the selling price, get 5-10% cash now, and get an 8-10% return...otherwise too risky. I would not be able to sleep and my cash would be tied up too long.
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Old 03-13-2018, 08:04 AM
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If it was my house I would be the bank. Sounds like a questionable buyer, NP, I would want 25K down, non-refundable at 8% interest for 2 yrs. On a specific date, loan must be paid in full or it goes into default at 1% interest per month. After 60 days in default if not paid in full , vacate premises.

I have done 3 houses similar to this format, people find the money or I sell it again. I am not a landlord, I hate the monthly wait but I sorta put a noose around their neck and it always works for me.
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Old 03-13-2018, 08:33 AM
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