All Forum Posts by: Dustin M.

Thanks for the replies.

I'm going to try to contact a few of the mortgage brokers here in Springfield. I know one of them works hand and hand with a Realtor that specializes in foreclosed homes. I bet he would have some leads.

In the mean time I'm going to send out letters to the individuals that are getting lis pendings notices.

Thanks,

Dustin Michaels

Hi,

I'm looking into doing some pre-foreclosure home buying. From what I've read here, most people get notices of defaults from their county building as a starting point for mailing out letters to potential sellers.

I contacted the county recorder today and they told me that they don't record notices of defaults in Sangamon County (which is in Illinois). They told me that they record "lis pendings" only. I thought a lis pending occurred before the lender goes to foreclose on the property so wouldn't it occur after the notices of defaults?

If my county recorder doesn't record notices of defaults then where can I get a list of them for free? Shouldn't NOD records be public record?

Thanks,

Dustin Michaels

Jeff,

The building is pretty small. Each unit is 1 bedroom 1 bathroom. The rents around here aren't that great. The neighborhood isn't to bad, however, it starts getting worse about a mile away from the home.

I goofed up. Should have $400 for the payments and interest not PITI. With a $50,000 loan amortized at 7% for 30 years it looks like it will cash flow around $80 a month.

Seems like it might not be that great of a buy at $50,000 because from what I've read here most people would like to see a cash flow of at least $100 per unit in a multiple unit building.

Hi.

A four-plex in my area is currently for sale for $70,000. From what I have learned from the sellers they are extremely motivated to sell because they recently divorced and neither of them wants to own the property outright. I was thinking about offering them $50,000 or less.

Currently the four-plex has rents of $450, $450, $550, and $550 for a total of $2000 a month. The owner pays the utilities which range from $400 to $600 a month.

The home needs a new roof on it (should be around $5000 to $6000) in addition, the house is using a boiler heat so it might be cost effective in the long run to upgrade this.

If I follow the 50% rule for expenses should I just add $600 for the utility bills to come up with my likely total expenses for the month. This would end up being $1600. This would only leave $400 for PITI.

Is $50,000 a fair price to offer for a home like this. Maybe I should offer less because of the roof and boiler issues (and the fact that the tenants don't pay for utilities).

Thanks,

Dustin Michaels

Thanks for the reply Jon. What you said makes sense. I guess that is why all of the other posts that talked about cash out refinancing never mentioned contract for deed. It does seem like a nifty strategy for acquiring more rental property.

Hi guys,

Is this possible? I have tried to do some searches on this website and google but haven't found anything yet.

This Sunday we are having an open house for the place we just finished rehabbing. In our ad we indicated that we would sell the place outright if someone had cash / bank loan or contract for deed.

It seems like we might have an easier time selling the place contract for deed at 10% interest and nearly double the price we paid to buy and rehab it :D

Does anyone know if we did sell it contract for deed could we then go to the bank and ask them if we could refinance the place we just sold? Could we refinance for the contract for deed sale price? This way we could have some money available to find and purchase some more deals.

I know some people do cash out refinancing but from all the posts I've seen about it, people are initially buying the house with cash up front. I haven't seen posts where someone is trying to do a cash out refinancing after they sell the place contract for deed.

Thanks,

Dustin Michaels

Hi guys,

Second house is almost done being rehabbed. I hope to have it sold outright / contract for deed by the end of February. Things are doing really well and I think I'm still on track to buy / sell 4 homes this year (which was my original goal for 2010).

Right now I'm looking at a piece of property and some help would be appreciated :D

The seller is pretty motivated to get out of a property for $60,000. It would sell for around $100,000 with a few minor fixes.

I offered $0 down and monthly payments of $500 for 10 years at 0% interest. There is a pretty good chance that he will take it. The owner currently owns the property outright.

Question 1: If I buy the property with the terms I described above is this a "subject to" transaction? My guess it isn't because there isn't an existing loan on the property because he owns it outright. If it isn't a "subject to" transaction what is the correct term for this type of transaction?

Question 2: I'm also guessing that the seller put a lien on the home until I make the final payment and completely repay him. Is this correct?

Once I buy the property I plan to fix it, and sell it outright or contract for deed.

Question 3: Will I be able to sell this property outright if someone has cash or needs to get a loan thru the bank. I've read on here about seasoning (which is a time period you have to hold on a recently purchased property before it can be resold to someone who needs a loan)? Would seasoning apply even though the original seller owned the property outright?

Question 4: If I am allowed to sell the property outright do I have to pay the original seller the rest of the money that I owe him at closing? For example, say I own the place for two months and make two $500 payments to the original seller. I then find a buyer who is willing to pay me $100,000 for it. At closing do I have to pay the original seller $59,000 (which is how much I still owe him)?

It would be in my best interest not to have to pay the original seller at closing because I have a 0% interest loan from him. I could use this extra money to finance some more deals. If I don't have to pay him at closing would the original seller still have a lien against the property that I sold to the end buyer? What would happen in the case where I stopped making payments to the original seller. Would the original seller be able to go after the end buyer to get the money that I was unable to pay him?

Question 5: If I can't sell the place outright I would also consider selling it contract for deed. Since I'm acting like the bank seasoning rules wouldn't apply selling the place contract for deed correct?

Question 6: Anything else I might not be considering for this type of transaction?

I hope I didn't ask to many questions. Like I said before any help would be appreciated. I haven't ran into the situation I'm in before (or seen a post like it on this website yet). I think I'm in a great situation considering that the original seller might give me a 0% interest loan over 10 years! It sure beats just coming up with $60,000 out of pocket lol.

Thanks in advance,

Dustin Michaels

Also this Tuesday I'm going to the sheriffs sale in the morning. It should be an interesting experience. I don't think I'll bid on anything but I think it will be worth checking it out because in the future I might be able to get a great deal on a house there!

I had some quick questions that I forgot to post in my earlier message.

When I am looking up the records for a piece of property and a bank takes back a piece of property are all liens on the property paid back so the title is free and clear?

When I talked to the person working at the recorder's office. They recommended if a house is owned by a individual that I do a check in the records to see if there are any liens against the individual independent on the piece of property I am looking at purchasing. It was her belief that if a lien was on an individual that I might be responsible for paying it if I purchased the home. Has anyone every encountered this situation before? It seems pretty goofy on why I would be responsible for liens outside of the property I buy from them. Perhaps she was mistaken or I am not explaining what she told me correctly.

Thanks again,

Dustin Michaels