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there's a deal - i think! - http://www.dealmakerscafe.com Forums

Original message

Steve

"there's a deal - i think!" , Mon 5 Mar 09:26

i've found a few of these deals and i know they'll work. i just can't get out of the box on this one.
dealmakers help me see the deal here.
payments are $640
would rent for $480 to $500
owes $39.000
worth $55.000
obviously i would take is subject-to but how do i make it cashflow. -STEVE

Replies:

Dealmaker
Moderator

"Step and swing" , Tue 6 Mar 07:57

Step up and take a swing at this one.

If rents are $500, add 20% to 30% to get you payments for the house. Now you're in the ballpark to cover the payment. You can setup a balloon on your note to the buyer in a few years to be cashed out or start over w/ another down-payment.

OR

Consider this short-term financing.. make the payments til you get a retail(cash) buyer. Even paint it to attract a little more cash.

There is a deal here.. several options for you to consider.

BTW, what's the remaining term on the underlying note?

Dealmaker

Steve

"Re(1):Step and swing" , Tue 6 Mar 09:55

i did buy the house and the mortgage will pay out in 2012! nice!!
only 11 years! - STEVE

RobertNM

"Re(1):there's a deal - i think!" , Mon 5 Mar 21:43

Steve, When I look at a deal, I look at three areas.(You will probobly see this again)Front end cash, cash flow and back end cash. If it has any of the three, I will usually try to make it work. You will read in the archives that there will not allways be cashflow. But there might be 2K up front and 13K on the back. There maybe no front end and no backend but it would cash flow good. Do you see my point. I would try to see first if you could get at least 640 a month for it. Then, work on the front end cash. The back-end cash is already there. Lynn has a great post on doing a deal with negative cashflow and still MAKING MONEY!!!!
Hope this helps.

Robert in NM

FreedomGuy

"Re(1):there's a deal - i think!" , Mon 5 Mar 12:36

I think that it makes sense to do a straight option in this type of scenario. That way, you pay no rent and don't have negative cash flow. YES, this type of deal might be less widely available. I guess it's really about your level of risk tolerance.

Bryan

moseskjp

"Re(1):there's a deal - i think!" , Mon 5 Mar 09:42

I'm sure others will be able to think much more creatively than I, but just a couple of ideas are:

1. Buy subject to & sell retail to someone with a new loan (i.e. cash out). Even if you have to make payments for 6 months, that still leaves you with over $13,000 in profit when you sell.

2. See if seller can refinance the existing loan to lower the payments before you take it subject to. Then, you can sell on CFD or L/O & still make monthly cash flow & the big payoff in the end.

Just my 2 cents.

...jp

"SW.SW.SW.SW."