All Forum Posts by: Bob Razler

Hello @Peter Halliday .  

One good play is to try to contact the second.  See if they have written it down (which most do for non-performing loans).  If you work with them, they might let you step into the debtor's shoes at the reduced balance.

They get a better debtor (hey, that rhymes!) and they get a performing loan at the value they are carrying it anyway.  You get in for less than an assumption or an assignment might be.

Bob 

Hello Team Coffee!

I am heading to JAX tomorrow to tour some neighborhoods and look at some deals.

In the event I return safely, I will share my findings.

If you don't hear from me, tell the world my story.

Bob

Can someone PM me the link to that sheet?

Hello @David Faulkner.  That is the plan right now.  They will finance the difference.  I was just trying to structure a deal where I put even less down.

Hello All:

I have a question about how to structure a deal, if it is possible at all.

FACTS:

I am the buyer.

The seller and I have an AOS for $300k.

The seller has an existing mortgage on the property with a balance of $60,000. This mortgage is in first position.

I am financing the purchase and was approved and ready to close with 25% down @ $300k.

The appraisal came in at $270k.

The seller did not want to lower the price.

I offered to close by financing the $270k and the seller extending me a note for the $30k shortfall.

The seller would like to walk away with more at the closing table.

I would like to offer to assume their mortgage/take subject to it.

QUESTION:

Since both lenders would want to be in first position, I don’t see how it would be possible to leave the original in place under the scenario.

Does anyone have any thoughts on how to structure this, if at all?

Thank you,

Bob

Hello @Anthony Robles .  

Good luck in your enterprise.  Send any deals you have my way as well.

[email protected]

Bob

Hello @Heather R.

To protect you.  You have an AOS that says you will purchase at $X.  You are showing up at the table with $X-Appraisal Difference.

Without an addendum, a Seller could say you didn't show up at closing with funds.

Bob

Hello @Heather R.  

I had the same situation recently.  The appraisal came in a bit low and I didn't want to kick in more cash.

After the obligatory back and forth about lowering the price or not; splitting the difference, etc. I made the offer to close at the appraisal price and they would finance the difference with a 5 yr interest-only note.

It actually improves your COC Return because you end up putting less down for the same cash flow (lower purchase price & no down payment on their note).

You most certainly should get an addendum to the AOS about it.  Otherwise, they could technically say you are in default at the closing table when you show up with not enough funds.

Also, since my seller wouldn't lower the price, I requested that they draft the note, etc. at their expense.

They initially rejected my offer but they just signed a 10-day extension to "think about it."

Bob

Yes!  Thank you @Michael Swan !  It was great to chat.

Hello @Alysa Phalen . 

Great to hear.

Let us know how it works out and if your attorney strikes any terms from the form.

Bob