All Forum Posts by: Justin Pierce

It's getting harder and harder to find homes at the 70% rule but you're crazy if you buy a home with any less margin.  I see a lot of people doing it and they will get burned eventually.  I usually do about 75% because I'm a licensed realtor and that saves me a little but don't do any less.  I have 8-12% in costs just from the closing table when I buy and then again when I sell... depending on which state I'm operating. 

Mathew is correct.  You have to at least put holes in the bottom before you fill in the pool or you'll end up with a marsh in your back yard.  Then it's just the cost of the fill dirt and labor.  Really you should compact the dirt as you go so you don't have a big sink hole.  Do you have any dirt or rocks on the property that can be used for fill?  Depending on the size of the pool it can easily push $9-10k down here in the D.C., Virginia, Maryland area.

All good advice.  I'm glad I asked.  You can't always think of everything.

Justin

Thanks, William and Jay.  Good information here.  You brought up some good points.  The seller is also going through a divorce.  I wonder, is the quit claim is a better way to go in this situation.  I'm worried about the wife seeking some of the equity if he still has any type of ownership.  

I am well capitalized.  I'm not worried about the due on sales clause.  If the bank makes a stink about this I'll just pay off the loan or refinance it.  In the mean time it drastically reduces my out of pocket expense and gives me a great rate.

Ok, I'm going to give it a shot. I have always heard about subject-to-financing deals.  I've always been skeptical but a deal came to me that seemed perfect for this scenario.

Here's the deal:

I've been advertising in Tooele Utah (my home town) that I buy homes looking to pick up some rentals.  An owner called me who is 6 months behind on payments and looking at foreclosure.

The home would be worth about $130,000 after about $20-25k in fix up.  He owes about $80,000.  He's about $6,000 behind on his payments.  His interest rate is 3.75%.  The deal is just a little too tight to buy outright and try to flip.  And, 3.75% interest is way cheaper money than I could ever get as an investor.

So, I pitched him on seller financing subject to current financing. I will bring the $6k needed to bring the loan current and cover closing costs. The title will be transferred to me and the current loan and insurance will stay in his name. I will make payments of $600 PITI directly to lender. The home will rent for $1,000-$1,100. It will probably cost me about $8,000 to get it rent ready.

To my surprise, I called 2 title companies in the area and explained the deal and both of them said they could handle it, no problem.  I figured most title agents would tell me I'm crazy.

Right now I'm struggling to put together a contract that covers the deal.

Who's done a deal like this? Any advice?

Does anyone know a title company in Utah around the Salt lake City, West Valley, or Tooele area that can do a closing on a subject to or contract for deed type deal?

I've got a seller out in Tooele who has agreed to terms and I need to move on it.

Those are really great rates.  Have you worked with anyone here on Bigger Pockets yet?

I'm a direct buyer looking for homes in DC, Maryland, N. Virginia, N. Utah, Eastern N.C. and possibly N. Florida.  What do you got?

DJ, I never closed the deal.  Turns out the guy wasn't paying his taxes and he failed to include taxes in his numbers along with some other stuff.  

Still, I wish I would have looked at it a little closer.  The numbers were still good and it was a great facility.  I like the business.  Good luck with your meeting.

Thanks, I just got an email from this guy.  He referenced BP so I checked here and found this.  There is no profile for him here anymore.  Thanks again, there are a lot of con's in this industry.  We need to stick together.