Hydrostatic Test- Windstorm Certificate -Termite Fumigation HELP!

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Hydrostatic Test- Windstorm Certificate -Termite Fumigation HELP!

Kassie Carrell
New Braunfels, TX · Member since 2017 · 39 posts · 29 votes
  1. Please Help!  Here's the deal I decided to sell my rental property, Bevly House, to get out of debt so that I could then reinvest here in New Braunfels, Texas where I live. I am a single mom with a limited amount of income. I currently have a loan at 8.5 percent for 30 years from a private lender. I was loaned 75K to buy this house and fix it up. As you can see from the link I fixed it up and started renting it back in 2013. I lived in it for a year while I fixed it up. I have been paying on this loan for 5 years and owe about 71K. 
  2. Here is my dilemma. I had the house up for sell at 129,900. Got an offer for 125K from an investor. Our closing date was set for June 28th, but now they want almost 12K or more worth of things done before closing.
  3. There is an apartment in the back that was not rehabbed at all. They want a new hot water heater, electrical etc. The foundation needs to be repaired before anyone can even live in that extra space. I always wanted to fix it up, but because of money constraints I never did. It has potential to be an extra source of income, because I currently rent to A&M college students. It doesn't make sense to make any repairs to the back apartment before the foundation and structure issues are fixed. It's not livable in my opinion at this time.
  4. The Hydrostatic test failed so there may be a possible leak and if so they may want to replace all the clay pipes. When I bought the house I had the city come out and test and it was all good. They also want a full tent fumigation for termites and a few other termite type things done to treat wood etc. Costing no less than 3K.
  5. The roof was put on when I bought it so it's new, but because I didn't know what I was doing, I didn't get it inspected. So it has to be windstorm certified and they want that too which is going to cost around 4K. 2K for inspector and 2K for roofer to make possible repairs to make it certifiable or whatever that is.
  6. My realtor said he needs to know something by noon today and that if I didn't agree to the new amendment then they would probably pull out of the deal. This will also be their first investment according to my realtor.

This is what I need. I need 25K to get out of bad debt. I am going through the Dave Ramsey program and I feel I need to do this to start fresh. I have been listening to as many BP podcasts as I can cram into each day. I am thinking now maybe there is a way I can keep the house and still pay off my debt. I listened to #221 Tim Shiner on the way back from Garner State Park yesterday and I think I heard him say something about being able to borrow on the equity in the house or something. Can I go to my bank NFCU (I have been with them for over 20 years) and see if they will work with me on refinancing? I need to pay back the private lender 71K. The house is worth at least 130K. I am new at all of this and I'll be honest I don't know what I am doing and I am a bit scared. I don't know anyone here in New Braunfels to reach out to for advice, BP is my only source at this time. Can anyone help me or give me ideas on how to go about this? Should I try to keep this house? Can I keep this house and still get out of debt quickly? After realtor fees, closing cost, inspection fees, and now the new amendment cost added to the equation I am not going to make much money on this deal. I had hoped to pay off debt and have 6 months living expenses put aside then I would be on step 4 of DRamsey plan of investing. Now I am thinking I am going to invest anyway, maybe I can make this rental work for me where I can still pay off debt and continue to make money off of it. P.S. I have never had a home loan before or used my VA loan. Any ideas at all would be welcomed. I have to give an answer 7 hours. I have been up all night trying to figure out what to do. I don't want to make a bad decision, but because I am new at real estate investing I don't know what a bad decision looks like right now. I need some guidance.

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Bart H.
Dallas, TX · Member since 2016 · 1k+ posts · 745 votes
9y
Originally posted by @Kassie Carrell:
  1. Please Help!  Here's the deal I decided to sell my rental property, Bevly House, to get out of debt so that I could then reinvest here in New Braunfels, Texas where I live. I am a single mom with a limited amount of income. I currently have a loan at 8.5 percent for 30 years from a private lender. I was loaned 75K to buy this house and fix it up. As you can see from the link I fixed it up and started renting it back in 2013. I lived in it for a year while I fixed it up. I have been paying on this loan for 5 years and owe about 71K. 
  2. Here is my dilemma. I had the house up for sell at 129,900. Got an offer for 125K from an investor. Our closing date was set for June 28th, but now they want almost 12K or more worth of things done before closing.
  3. There is an apartment in the back that was not rehabbed at all. They want a new hot water heater, electrical etc. The foundation needs to be repaired before anyone can even live in that extra space. I always wanted to fix it up, but because of money constraints I never did. It has potential to be an extra source of income, because I currently rent to A&M college students. It doesn't make sense to make any repairs to the back apartment before the foundation and structure issues are fixed. It's not livable in my opinion at this time.
  4. The Hydrostatic test failed so there may be a possible leak and if so they may want to replace all the clay pipes. When I bought the house I had the city come out and test and it was all good. They also want a full tent fumigation for termites and a few other termite type things done to treat wood etc. Costing no less than 3K.
  5. The roof was put on when I bought it so it's new, but because I didn't know what I was doing, I didn't get it inspected. So it has to be windstorm certified and they want that too which is going to cost around 4K. 2K for inspector and 2K for roofer to make possible repairs to make it certifiable or whatever that is.
  6. My realtor said he needs to know something by noon today and that if I didn't agree to the new amendment then they would probably pull out of the deal. This will also be their first investment according to my realtor.

This is what I need. I need 25K to get out of bad debt. I am going through the Dave Ramsey program and I feel I need to do this to start fresh. I have been listening to as many BP podcasts as I can cram into each day. I am thinking now maybe there is a way I can keep the house and still pay off my debt. I listened to #221 Tim Shiner on the way back from Garner State Park yesterday and I think I heard him say something about being able to borrow on the equity in the house or something. Can I go to my bank NFCU (I have been with them for over 20 years) and see if they will work with me on refinancing? I need to pay back the private lender 71K. The house is worth at least 130K. I am new at all of this and I'll be honest I don't know what I am doing and I am a bit scared. I don't know anyone here in New Braunfels to reach out to for advice, BP is my only source at this time. Can anyone help me or give me ideas on how to go about this? Should I try to keep this house? Can I keep this house and still get out of debt quickly? After realtor fees, closing cost, inspection fees, and now the new amendment cost added to the equation I am not going to make much money on this deal. I had hoped to pay off debt and have 6 months living expenses put aside then I would be on step 4 of DRamsey plan of investing. Now I am thinking I am going to invest anyway, maybe I can make this rental work for me where I can still pay off debt and continue to make money off of it. P.S. I have never had a home loan before or used my VA loan. Any ideas at all would be welcomed. I have to give an answer 7 hours. I have been up all night trying to figure out what to do. I don't want to make a bad decision, but because I am new at real estate investing I don't know what a bad decision looks like right now. I need some guidance.

I think your buyers are trying to take advantage of you.  Make a small counter, say $1,000 off the sales price and call it a day.  They are just putting a big list of items together to see if they can get more out of you. 

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  • Rick Pozos
    Wholesaler, Rehabber and Landlord · San Antonio, TX · Member since 2014 · 2k+ posts · 2k+ votes
    9y

    You do not have to make all the repairs. You can tell them that the house is as is. They may walk, but that is ok. There will be other people. The home has not been on the market very long. I currently have a duplex for sale in corpus christi. It has been a couple of months, we have gotten several low ball offers and even some to make repairs. We have decided to wait.

    One thing you said was WAY WRONG. "I am on a limited income". NOBODY limits your income. Have you gotten rid of all the junk that you have in the house that someone else might want to pay for? Have you taken up a side hustle, as they say(part time job)? There are things that you can do to make extra money. If you are able to find deals, you can get them to other investors and they will pay people for this. It is called wholeselling.

    1Reply
  • Matt Madalis
    Investor · Frederick, MD · Member since 2015 · 42 posts · 17 votes
    9y

    One thing you did not mention is whether or not this is a cash-flowing rental property or why are you selling it?  Is the house a bad investment, or are you selling to pay off other debt?

    If you go to your credit union, they will likely require an appraisal for a re-finance.  Typically a refinance will be up to 80% of your home's value.  So assuming you appraise for $130K, you may be able to borrow up to $104K at an interest rate much better than 8.5%.  This sounds like you would have money to pay back your original lender plus some left over to pay off bad debt if that is your intent. 

    3Reply
  • Mike ReynoldsPro Member
    construction · Nacogdoches, TX · Member since 2011 · 2k+ posts · 1k+ votes
    9y
    Originally posted by @Kassie Carrell:
    1. Please Help!  Here's the deal I decided to sell my rental property, Bevly House, to get out of debt so that I could then reinvest here in New Braunfels, Texas where I live. I am a single mom with a limited amount of income. I currently have a loan at 8.5 percent for 30 years from a private lender. I was loaned 75K to buy this house and fix it up. As you can see from the link I fixed it up and started renting it back in 2013. I lived in it for a year while I fixed it up. I have been paying on this loan for 5 years and owe about 71K. 
    2. Here is my dilemma. I had the house up for sell at 129,900. Got an offer for 125K from an investor. Our closing date was set for June 28th, but now they want almost 12K or more worth of things done before closing.
    3. There is an apartment in the back that was not rehabbed at all. They want a new hot water heater, electrical etc. The foundation needs to be repaired before anyone can even live in that extra space. I always wanted to fix it up, but because of money constraints I never did. It has potential to be an extra source of income, because I currently rent to A&M college students. It doesn't make sense to make any repairs to the back apartment before the foundation and structure issues are fixed. It's not livable in my opinion at this time.
    4. The Hydrostatic test failed so there may be a possible leak and if so they may want to replace all the clay pipes. When I bought the house I had the city come out and test and it was all good. They also want a full tent fumigation for termites and a few other termite type things done to treat wood etc. Costing no less than 3K.
    5. The roof was put on when I bought it so it's new, but because I didn't know what I was doing, I didn't get it inspected. So it has to be windstorm certified and they want that too which is going to cost around 4K. 2K for inspector and 2K for roofer to make possible repairs to make it certifiable or whatever that is.
    6. My realtor said he needs to know something by noon today and that if I didn't agree to the new amendment then they would probably pull out of the deal. This will also be their first investment according to my realtor.

    This is what I need. I need 25K to get out of bad debt. I am going through the Dave Ramsey program and I feel I need to do this to start fresh. I have been listening to as many BP podcasts as I can cram into each day. I am thinking now maybe there is a way I can keep the house and still pay off my debt. I listened to #221 Tim Shiner on the way back from Garner State Park yesterday and I think I heard him say something about being able to borrow on the equity in the house or something. Can I go to my bank NFCU (I have been with them for over 20 years) and see if they will work with me on refinancing? I need to pay back the private lender 71K. The house is worth at least 130K. I am new at all of this and I'll be honest I don't know what I am doing and I am a bit scared. I don't know anyone here in New Braunfels to reach out to for advice, BP is my only source at this time. Can anyone help me or give me ideas on how to go about this? Should I try to keep this house? Can I keep this house and still get out of debt quickly? After realtor fees, closing cost, inspection fees, and now the new amendment cost added to the equation I am not going to make much money on this deal. I had hoped to pay off debt and have 6 months living expenses put aside then I would be on step 4 of DRamsey plan of investing. Now I am thinking I am going to invest anyway, maybe I can make this rental work for me where I can still pay off debt and continue to make money off of it. P.S. I have never had a home loan before or used my VA loan. Any ideas at all would be welcomed. I have to give an answer 7 hours. I have been up all night trying to figure out what to do. I don't want to make a bad decision, but because I am new at real estate investing I don't know what a bad decision looks like right now. I need some guidance.

     I agree with the others. Sell it as is. Work from there. The nearest TDI Inspector to your home that does both commercial and residential is in Alice. PM me if you want that number. His name is Willie. This is kind of a new thing here and not all cities comply yet. 

    How bad is the slab on the apartment? Could this be rented out as a STR?

    1Reply
  • Kassie Carrell
    OP
    New Braunfels, TX · Member since 2017 · 39 posts · 29 votes
    9y

    @Matt Madalis @Rick Pozos It is a cash flowing property. The only thing I don't like about it is the fact that the insurance and taxes are so high. Because I am in an area where they require wind storm "hurricane" insurance. Property taxes in CC are some of the highest in the state. Rick I am side hustling if you will. I work at a pizza place down the street making and delivering pizzas as well as mowing all my neighbors yards, and last week I took old wall paper off a womans kitchen and repainted it for her. I find out June 1st if I the VA will pay for my 4 week school to get my CDL. If they do then I start school July 3rd and should be working full time in August. I am hoping to use this money for REI. I feel like I am doing everything I possibly can. Honestly. Matt, I really want to be completely out of debt. I got in debt when my husband and I separated last year then finally divorced. I was getting very little help financially and ended up getting a few credit cards to pay for food, school clothes, gas, etc. I wish I had not of done that and regret it. I just want to be debt free again and live on what I have. Credit card debt is the worst debt and I despise it. I just want to be free of it. I was thinking I pay for the Wind Storm Certificate, because I need that anyway for future buyers, but not for anything else. The rest is as is. Is that too much to ask?

    0Reply
  • Bart H.
    Dallas, TX · Member since 2016 · 1k+ posts · 745 votes
    9y
    Originally posted by @Kassie Carrell:
    1. Please Help!  Here's the deal I decided to sell my rental property, Bevly House, to get out of debt so that I could then reinvest here in New Braunfels, Texas where I live. I am a single mom with a limited amount of income. I currently have a loan at 8.5 percent for 30 years from a private lender. I was loaned 75K to buy this house and fix it up. As you can see from the link I fixed it up and started renting it back in 2013. I lived in it for a year while I fixed it up. I have been paying on this loan for 5 years and owe about 71K. 
    2. Here is my dilemma. I had the house up for sell at 129,900. Got an offer for 125K from an investor. Our closing date was set for June 28th, but now they want almost 12K or more worth of things done before closing.
    3. There is an apartment in the back that was not rehabbed at all. They want a new hot water heater, electrical etc. The foundation needs to be repaired before anyone can even live in that extra space. I always wanted to fix it up, but because of money constraints I never did. It has potential to be an extra source of income, because I currently rent to A&M college students. It doesn't make sense to make any repairs to the back apartment before the foundation and structure issues are fixed. It's not livable in my opinion at this time.
    4. The Hydrostatic test failed so there may be a possible leak and if so they may want to replace all the clay pipes. When I bought the house I had the city come out and test and it was all good. They also want a full tent fumigation for termites and a few other termite type things done to treat wood etc. Costing no less than 3K.
    5. The roof was put on when I bought it so it's new, but because I didn't know what I was doing, I didn't get it inspected. So it has to be windstorm certified and they want that too which is going to cost around 4K. 2K for inspector and 2K for roofer to make possible repairs to make it certifiable or whatever that is.
    6. My realtor said he needs to know something by noon today and that if I didn't agree to the new amendment then they would probably pull out of the deal. This will also be their first investment according to my realtor.

    This is what I need. I need 25K to get out of bad debt. I am going through the Dave Ramsey program and I feel I need to do this to start fresh. I have been listening to as many BP podcasts as I can cram into each day. I am thinking now maybe there is a way I can keep the house and still pay off my debt. I listened to #221 Tim Shiner on the way back from Garner State Park yesterday and I think I heard him say something about being able to borrow on the equity in the house or something. Can I go to my bank NFCU (I have been with them for over 20 years) and see if they will work with me on refinancing? I need to pay back the private lender 71K. The house is worth at least 130K. I am new at all of this and I'll be honest I don't know what I am doing and I am a bit scared. I don't know anyone here in New Braunfels to reach out to for advice, BP is my only source at this time. Can anyone help me or give me ideas on how to go about this? Should I try to keep this house? Can I keep this house and still get out of debt quickly? After realtor fees, closing cost, inspection fees, and now the new amendment cost added to the equation I am not going to make much money on this deal. I had hoped to pay off debt and have 6 months living expenses put aside then I would be on step 4 of DRamsey plan of investing. Now I am thinking I am going to invest anyway, maybe I can make this rental work for me where I can still pay off debt and continue to make money off of it. P.S. I have never had a home loan before or used my VA loan. Any ideas at all would be welcomed. I have to give an answer 7 hours. I have been up all night trying to figure out what to do. I don't want to make a bad decision, but because I am new at real estate investing I don't know what a bad decision looks like right now. I need some guidance.

    I think your buyers are trying to take advantage of you.  Make a small counter, say $1,000 off the sales price and call it a day.  They are just putting a big list of items together to see if they can get more out of you. 

    4Reply
  • Kassie Carrell
    OP
    New Braunfels, TX · Member since 2017 · 39 posts · 29 votes
    9y

    @Mike Reynolds If I can find the money to rehab it yes it could be an STR or even a long term rental as the renters I have had for the past few years have all been students from A&M sharing the home. I think I need that number. I am going to call this morning to see what my options are for all of that. I have a roofers number and he is the one that told me those numbers so I need to check with an inspector to get a real quote. Thank you so much.

    1Reply
  • Guy Gimenez
    Investor · Corpus Christi, TX · Member since 2012 · 2k+ posts · 1k+ votes
    9y

    @Kassie Carrell

    Disclosure: I'm both an investor and licensed broker. 

    1.  I will assume the investor / buyer in your sale contract is not really an investor at all.  Investors buy at a discount, speculators pay retail. 

    2.  By your own admission, you don't have the funds to make the requested repairs and going further into debt to try and push this deal is likely a very bad mistake. Let the buyer walk and revisit your pricing on your house based on the information you have in hand. 

    3.  In addition to your inexperience in real estate, it sounds like your Realtor also lacks experience or they would be providing answers for you instead of forcing you to reach out to disinterested third parties here on BP for guidance. You may wish to re-think that relationship too. 

    4.  You are in no position to keep the house because by your own admission you lack the cash reserves and income to be a landlord. Since you only owe $71K on the house, consider a price reduction that will get the house sold quickly in "as-is" condition and move on with your life.  

    2Reply
  • Kassie Carrell
    OP
    New Braunfels, TX · Member since 2017 · 39 posts · 29 votes
    9y

    @Bart H. yes originally they offered 122 I countered at 127 and we settled on 125. Maybe you are right. I know that's how the game is played though so I am not offended. I just can't afford to pay for all these things they wanted and in the contract originally it said the property was being sold as is. I have never sold a property before so again I am new at this. 

    0Reply
  • Lisa Edwards
    Real Estate Investor / Real Estate Agent · Corpus Christi, TX · Member since 2016 · 42 posts · 15 votes
    9y

    Kassie,

    Here's my 2c for what its worth.... you're trying to sell the house for retail and it needs expensive work. Your realtor is giving you some really bad advise. And the "investors" are clueless. 

    First, and most important, your house is at risk with a plumbing leak and termites.

    You need a plumbing isolation test to see where the leak is and then and only then can you determine the price on a reroute.

    Termite treatment can be a spot treatment or tenting the entire home. The first maybe $1000 the later a bit more. 

    There is an engineering company in town that will come out and inspect the roof and certify it,,,if it is up to code. Not very expensive at all. The point being the new homeowner cannot get windstorm insurance with certification on the roof. Do you presently have windstorm insurance on the home? Did you put new windows in the house? Do they have windstorm also?

    You need a new realtor and some better advise.

    You can do the plumbing roof and termite work and then list the house for retail price or sell the house "as-is" but at a discounted price. 

    Consider re-fi to lower your interest rate. Can you show a steady rental income? The house should rent from $900-1200 and if that's covers the mortgage you're good.

    Consider owner finance and you can possibility get 15-20K down payment and have the new owner cover your mortgage.

    Kassie, give me a call if you want to discuss your options, I'd be glad to help.

    2Reply
  • Mike ReynoldsPro Member
    construction · Nacogdoches, TX · Member since 2011 · 2k+ posts · 1k+ votes
    9y
    Originally posted by @Kassie Carrell:

    @Matt Madalis @Rick Pozos It is a cash flowing property. The only thing I don't like about it is the fact that the insurance and taxes are so high. Because I am in an area where they require wind storm "hurricane" insurance. Property taxes in CC are some of the highest in the state. Rick I am side hustling if you will. I work at a pizza place down the street making and delivering pizzas as well as mowing all my neighbors yards, and last week I took old wall paper off a womans kitchen and repainted it for her. I find out June 1st if I the VA will pay for my 4 week school to get my CDL. If they do then I start school July 3rd and should be working full time in August. I am hoping to use this money for REI. I feel like I am doing everything I possibly can. Honestly. Matt, I really want to be completely out of debt. I got in debt when my husband and I separated last year then finally divorced. I was getting very little help financially and ended up getting a few credit cards to pay for food, school clothes, gas, etc. I wish I had not of done that and regret it. I just want to be debt free again and live on what I have. Credit card debt is the worst debt and I despise it. I just want to be free of it. I was thinking I pay for the Wind Storm Certificate, because I need that anyway for future buyers, but not for anything else. The rest is as is. Is that too much to ask?

     I agree with Bart. They just want to get you lower. Fwiw, if your house is pre 1988 I don't think it is required for a TDI inspection. You seem to have insurance without one after all. That might be something to check with they local authorities though. 

    1Reply
  • Kassie Carrell
    OP
    New Braunfels, TX · Member since 2017 · 39 posts · 29 votes
    9y

    @Guy Gimenez @Lisa Edwards I rent the property for 1300. Guy you are right. I have no money to be a landlord. I am struggling. I found myself divorced with 3 kids to feed and trying to find a job, a real job. I was a Marine then got out after my 4 years and stayed at home with our 3 kids. My husband left me when our 3rd child was 21 days old. I went back to school, worked, and 3 years later I met my second husband who was 11 years older than me. He worked off shore in oil and gas and long story short it was a lonely, sad marriage. My point is that I know I am in no position at all for a lot of things. I gave my life to my children and two men that were unfaithful and unwise with their money. I am now happily on my own and doing the best I can to keep my feet on the ground and figure out how I can make a good life for my girls and I. I have struggled most of my life and I am done! I am doing everything I can to learn a better way. Devouring every book I can and taking advantage of all the free stuff on BP. I don't have cable, spotify (that's a big deal) : )  a nice car...anything like that. I have never been in debt until I married. Because the girls dad retired from the military he stopped paying child support and isn't working (The Attorney General is working on it).  My ex is supposed to pay 1K a month, but hasn't been. So yes I am desperate a little, but I know there is a way and I know that I will find it in Real Estate. I am not sitting around waiting for something good to happen, I am trying my best to do any work I can find. It's quite humbling, but when you have kids to feed you don't have the luxury of pride. I am not saying any of this for sympathy. I am only trying to make the point that I am sure it's obvious I lack the skills and experience and maybe you are right I am in no position to keep the house, but may I ask when will I be in a position to get into the real estate market? Thank you for your candidness I really do appreciate it as I have have little time for subtleties. 

    0Reply
  • Guy Gimenez
    Investor · Corpus Christi, TX · Member since 2012 · 2k+ posts · 1k+ votes
    9y

    @Kassie Carrell

    1.  Seek out any financial assistance available from local agencies and churches. I don't know what areas of expertise you may have, but I suspect you'll ideally want to work from home since you're a single mom with 3 children (assuming they're not all of school age yet). And since you didn't mention family, I will also assume there are no options for assistance on that end. Not sure I can offer much assistance on the income side since I don't have enough information to give you direction. 

    2.  First step financially is to pay attention to Dave Ramsey's plan. I don't agree with him on some things, but overall, in your current position you should heed the message.

    3.  I would say you should get into real estate once you've got the primary income issue resolved and you're back on your feet financially, per Dave's plan. Right now, you don't have either the money or the relationships necessary to consider investing. Once you're no longer under the gun financially, you will be able to start building the relationships needed to leverage other's time, money and experience, all of which are necessary since these are the things you're needing right now. This doesn't mean you might not come upon a potential investment during your normal course of daily activities, but if you do, you should reach out to a seasoned investor who will then either pay you for the lead or share in the profit from that lead should it turn into revenue for the investor. 

    I partner with newer investors in the following markets:  Corpus Christi, Houston/Galveston, San Antonio and the IH35 corrider from Waco to San Antonio.    

    Hope this helps just a bit Kassie. 

    0Reply
  • Kassie Carrell
    OP
    New Braunfels, TX · Member since 2017 · 39 posts · 29 votes
    9y

    @Guy Gimenez Yes, thank you. My daughters are 14, 15, and 17. I agree with sticking to the Dave Ramsey plan and that is why I wanted to get out of debt first and then invest. Right now I have an investment that has a good positive cash flow, but I have credit cards bills that I can barely pay. It doesn't make sense. So I will try to sell as is and see what happens. I was surprised when my realtor told me that an investor was willing to pay 125K. I too thought they didn't know what they were doing because I knew an investor would come in much lower. If they were buying to live in the home it would make sense. I just can't kick my tenants out so that is why I am looking to sell to an investor right now. Thanks for the help. All the best!

    0Reply
  • Brian Banks
    Problem Solver · Corpus Christi, TX · Member since 2015 · 13 posts · 14 votes
    9y

    Kassie, you may want to consider selling an option to a perspective buyer. I did this for a home in Idaho where the market had gone to hell. My reason for selling this way was different but the process works the same. Here's how it works:

    Your buyer pays an option fee to purchase the home and you agree to close at a predetermined date in the future. 

    The option fee will be applied to the purchase price.

    The buyer rents the property until the agreed closing date. 

    You write the contract so that the buyer is responsible for repairs necessary to close.

    I sold one of my Idaho houses for $145,000. 

    I got a $20,000.00 non refundable option payment up front.

    I have a lease agreement that makes the mortgage payment and puts a little extra in my pocket along with a purchase agreement that allows the buyer to exercise their option to purchase within 2 years.

    They are responsible for all repairs, I still own the property. 

    If they fail to close or violate the agreement I keep their option money and find another buyer.

    You will find that there are a lot of people in Corpus Christi with plenty of money to make a large down payment like this but aren't able to get a bank loan for some reason.

    Happy Investing. You've made it this far. You're doing great. Hang in there.

    2Reply
  • Kassie Carrell
    OP
    New Braunfels, TX · Member since 2017 · 39 posts · 29 votes
    9y

    Thanks @Brian Banks  

    I have tenants in the house for at least 6 more months. I can't kick them out so I don't know if I can do this right now or not. I like the idea of it though and never thought of that. It seems there are so many ways to do REI's. I have so much to learn. Thank you.

    0Reply
  • Guy Gimenez
    Investor · Corpus Christi, TX · Member since 2012 · 2k+ posts · 1k+ votes
    9y

    @Kassie Carrell

    @Kassie Carrell@Brian Banks

    @Brian BanksKassie, Brian is correct in that lease options in Texas are certainly legal but they're much different here than in other states. Don't go into this scenario without considerable discussion with an attorney since you're unfamiliar with Executory Contracts in Texas, as defined in the Texas Property Code. If a L/O in Texas is not performed to the letter of the law, the Buyer has considerable recourse against a Seller (YOU) and you can end up in a much worse financial predicament. And since your property is under a lease agreement, and assuming the tenant's have not breached the agreement, a buyer must take the property subject to that lease.

    1Reply
  • Lisa Edwards
    Real Estate Investor / Real Estate Agent · Corpus Christi, TX · Member since 2016 · 42 posts · 15 votes
    9y

    Lease option, while not illegal in Texas, is very tricky to do. It can end up coming back to bite you, big time.  I wouldn't go there.

    1Reply
  • Kassie Carrell
    OP
    New Braunfels, TX · Member since 2017 · 39 posts · 29 votes
    9y
    Lisa Edwards I'm at the bank and they are saying you can not get cash out on equity loan in Texas. Is this true?
    0Reply
  • Karen S.
    Investor · Sewickley, PA · Member since 2017 · 59 posts · 32 votes
    9y

    Hi Kassie

    I don't have a lot of experience in your type of situation but I wanted to offer two things:

    1) i hear you on the life with kids situation..btw I don't have spotify and i can afford it. nope still don't have it. it's hard saying no constantly..i have sympathy for your situation

    2) apart from all the numbers, do not underestimate the stress of keeping this house..selling it as is, even if the total money that comes back to you is not great, will be a huge relief. sell as fast as possible and live to invest another day

    good luck to you

    2Reply
  • Kassie Carrell
    OP
    New Braunfels, TX · Member since 2017 · 39 posts · 29 votes
    9y
    Karen S. As I left the bank I thought the same thing. Thanks for your reply. I called my realtor and lowered the price to 118,900 as is only. I just need relief from this and from my debt that I accumulated from emotional spending on my kids when my husband left. Honestly most of it was school clothes, food, bills etc. but I could have been smarter and done better. I'm back on track though and I'm determined and motivated to live like no else now so later I can live like no one else. I pray the house sells quickly and I get a better paying job soon so that I can start saving to invest the right way. Thanks again for your input and encouragement. I know it's going to get better. I've never been more hopeful about my future.
    0Reply
  • Bart H.
    Dallas, TX · Member since 2016 · 1k+ posts · 745 votes
    9y
    Originally posted by @Kassie Carrell:

    Thanks @Brian Banks  

    I have tenants in the house for at least 6 more months. I can't kick them out so I don't know if I can do this right now or not. I like the idea of it though and never thought of that. It seems there are so many ways to do REI's. I have so much to learn. Thank you.

    Kassie, may I suggest, slow down, take a deep breath.  You are running scared, your real estate agent is not helping you.  You have a buyer, they are triying to get the price down and are scaring you with a laundry list of items.  

    As others have said, termites could be a big deal or it could be nothing.  My guess is its nothing.  Same with the roof.  Have you tried to counter by lowering the price by a thousand dollars?

    If money is tight, may I suggest that you just find a sales price (if there is equity), that the buyer is willing to take on those items?  That way you dont have to come with money out of pocket to make repairs. 

    2Reply
  • Kassie Carrell
    OP
    New Braunfels, TX · Member since 2017 · 39 posts · 29 votes
    9y
    Bart Hedgcock Bart I lowered the price to 118,900 as is only. I do need to slow down and I did. At this point the only thing I can and must do is trust God. The house will sell. The kids will eat. I won't be in this situation forever. I do have money coming in and we will be fine. I guess it's hitting me that I really am on my own and I panicked. I took a long nap and now I feel silly for telling everyone too much about my situation. Oh the joys of being a woman. Is there a way to delete our stories we post? 😬 Thank you for your reply. I'm going to use wisdom, and not let fear rule. I can do this. 💪🏻 Thanks.
    1Reply
  • Betty Cruz
    San Antonio, TX · Member since 2016 · 240 posts · 163 votes
    9y
    Kassie Carrell please contact me through a private message. I would like to help.
    1Reply
  • Charlie MacPherson
    China, ME · Member since 2014 · 3k+ posts · 4k+ votes
    9y

    @Kassie Carrell.  I don't know your particular market, so I can't comment on the numbers - but your agent should have provided you with a thorough set of comps.

    It sounds to me like the buyers are running roughshod over you.  Perhaps they sense your desperation.  Perhaps your agent revealed it.

    If the home is properly priced for its condition, your agent needs to give you a LOT better advice.  If everything is as it appears, I'd suggest that you consider getting a new agent.

    Just because a buyer asks for something doesn't mean you have to agree to it.  It sounds like you and your agent need to practice saying "no".

    A few general rules for negotiating:

    1. Always be pleasant.  Choose to treat everybody like they're nice, reasonable people who just want the best deal they can get - not low-life scum who are trying to screw you.

    2. Never give up something without getting something back in return.

    3. Give in on the little things, not on the big things.

    4. When the other side asks for a big concession, offer a much smaller one.

    5. Pick the hill you want to die on.  Know your non-negotiables and stick to them.

    6. Don't let yourself come down with a case of the "hardly waits".  That's when you make bad decisions.

    7. Never be afraid to walk away from a deal.

    All of these "rules" have to be tempered by your real life situation.  Financial pressure, opportunities for a better deal, changes in life circumstances can all be a big influence.  But start with these in your back pocket the next time you're in negotiations and you should improve your position considerably.

    2Reply
  • Clifton Kaderli
    Residential Real Estate Broker · Winchester, VA · Member since 2014 · 136 posts · 34 votes
    9y

    Look like your getting some great input on your questions. Kudos to the BP community. You mention Dave Ramsey motivating much of your process. He certainly has some good advise, but I don't agree with all of what he says. I suggest combine your approach with inputs from sources like Robert Kiyosaki. A wise person has many counselors.  

    1Reply
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