Real Estate Investing!

ANALYZE THIS: PART 2 - http://www.dealmakerscafe.com Forums

Original message

moseskjp

"ANALYZE THIS: PART 2" , Fri 19 Jan 05:25

Here's the second lead that called from my ad:

- Unique motivation: They have excellent credit, no late payments, no problems at all except they simply need more room for their family (esp. handicap son) & they want it NOW!

- He's already told me he's willing to "walk away from closing" with nothing but to break even with his mortgage just to get this done fast.

The House:
- 3/2 purchased new in '95 for $69,000
- Currently owes $66,800
- He said it was appraised in 2/00 for $75,000.
- Had listed previously w/realtor for 6 mos @ $74,000
- in IMMACULATE condition right now, needs nothing
- Comps unknown as of yet, but houses on same street are RENTING for $750-$850/mo.

- I skipped "subject to" b/c of his need & ability to qualify for a new loan for their next house. I offered a CFD. I pay for all closing costs & expenses & begin making his payments next month & he get's out of the house very quickly & get's full credit for the CFD on this loan with his new lender. They're interested but asked if A) I could provide some references (I'm working on it & will email them today), B) could I pay off the CFD in 1 year so as not to keep their name attached to the property very long.

After talking to Lynn yesterday, it sounds like a CFD w/1 yr. balloon is a bad idea b/c my tenant/buyer or CFD buyer might not be able/willing to cash out by then. So, I'm thinking I'm going to come back at them offering a CFD or L/O with a 1 yr. balloon/purchase date with THE OPTION OF RENEWING for one more year after that. What do you think? Where would you go with this one? Keep in mind that these people are a-typically sophisticated compared to the standard person who responds to these types of ads. They're going to ask the tough questions & do their homework.

Thanks again for your ideas/comments.

...jp

"SW-SW-SW-SW"...anyone guess what it stands for?

Replies:

wgreau

"Re(1):ANALYZE THIS: PART 2" , Fri 19 Jan 11:21

Some will, some won't, so what, some are waiting....[biggrin]

William Columbus OH

moseskjp

"Re(2):ANALYZE THIS: PART 2" , Fri 19 Jan 12:50

There ya Go!

...jp

"SW-SW-SW-SW"...anyone guess what it stands for?

RBryanEllis

"Re(1):ANALYZE THIS: PART 2" , Fri 19 Jan 09:11

Hi JP:

I think I sat next to you at the seminar in Memphis a few months ago. Drop me a note sometime! rbryanellis@yahoo.com

Bryan Ellis

TJack

"Re(1):ANALYZE THIS: PART 2" , Fri 19 Jan 08:55

If keeping their name attached to the property is really a concern they can transfer title to a trust. They can still be beneficiary of the trust, then assign the beneficial interest when the property is paid off. This should be done in escrow btw.

They are probably more concerned about the payments getting made than their name being on the title however. That's why they asked for references and why it is so important to get letters of recommendation (testimonial) from your clients.

BTW...Terry(Houston) I now have a form for clients to fill in if you still need an example.

moseskjp

"Re(2):ANALYZE THIS: PART 2" , Fri 19 Jan 13:01

quote:
After talking to Lynn yesterday, it sounds like a CFD w/1 yr. balloon is a bad idea b/c my tenant/buyer or CFD buyer might not be able/willing to cash out by then. So, I'm thinking I'm going to come b ...

So what about this part?

Thanks for the advice/feedback about their name tied to the house. You guys rock!

...jp

"SW.SW.SW.SW."

Lynn
Moderator

"Re(2):ANALYZE THIS: PART 2" , Fri 19 Jan 09:52

It's not their name on title that they are concerned about, it's there name on the loan and being able to qualify for financing on their new home.

Since you don't have any letters of recommendations yet (because you haven't done your first deal) provide them with reference letters from other people in your community, bankers, attorneys, CPAs, neighbors, Mom etc. If your credit is good, show them a copy of your credit report.

You can tell them that you don't make a practice of giving out names and numbers of people you have purchased from because many of them are in sensitive situations. Also, let them know that you have NEVER had a complaint with the Better Business Bureau.

You are right that this isn't your typical motivated seller. Most will not ask so many questions.

Happy Investing!
Lynn

Good Luck!
Lynn

Knowledge is important but all the knowledge in the world is worthless without action! How many offers did "you" make today?

TJack

"Re(3):ANALYZE THIS: PART 2" , Fri 19 Jan 10:44

Since they should get full credit for the payments with a CFD, the REAL concern is their credit, and "How do I know you'll make the payments"? I can understand their concern about remaining on the loan, even with a credible investor. That's why we love MOTIVATED SELLERS soooo much. This is a tough position for a new investor for sure. I agree with Lynns suggestions on the cure. It is VERY important to get letters of recommendation from clients from the very first deal so as to overcome this hurdle as soon as possible.

wgreau

"Re(4):ANALYZE THIS: PART 2" , Fri 19 Jan 11:26

TJ: If you belong to your local REIA group you could get some of those people as references and tell them what to say..or have them sign a letter that you create for that purpose.
I know a number of Realtors from a couple groups I attend and have had them sign a letter that basically says they know me to be reputable and of good character.

William Columbus OH