All Forum Posts by: Jared Haxton

@Melanie P. Ok. I see what you are saying. Even if a title company were to manage the setup making sure all parties are paid, the cheap debt and cash flow would not be enough to be enticing to any investor even if midterm rental could yield a healthy return. 

Are there any creative things that could be done to get to my goals or from your standpoint,  or is it pretty well a firm "not gonna fly" type scenario? Nothing a "subject to" enthusiast could think up? Thanks again to everyone!

@Melanie P. I owe $125k on it right now. It cash flows for us incredibly well so it wouldn't be a hardship to keep on renting it out. But I would rather get a good-sized down payment that I can use to invest elsewhere and get a good sales price due to the cheap financing.

@Rick Pozos Yeah. That would be an amazing setup for the buyer to get that. I can't offer all of those big wins. And maybe I am misunderstanding something but if they purchased the property from me, take over taxes, insurance, and HOA, wouldn't they be on title? I would just be a lein-holder on the property?

Thanks for your replies! 

@Chris Seveney Ok. Thank you for your thoughts on this. I landed on the numbers I did because that makes it cash flow nicely for the buyer in addition to meeting my goals. 

From the sound of it, the cheap debt is not really a motivator at all for you. And if it were set up where everything went through a title company so the buyer pays the title company, they manage the buyer's loan (from me), and the title company ensures my mortgage is paid without my direct involvement... what parts of the transaction would feel risky or not worth the headache to you? And would the title not be in the buyer's name in a transaction like this? 

Thanks!

Hi BP Community,

I own a 2-bed/2-bath condo in Prescott, AZ (near Embry-Riddle Aeronautical University, hospitals, and medical facilities), and I’m exploring selling it via seller financing. We have had it as a rental for 5 years now and have had only 15 days of vacancy. I’d love your input on whether this deal could appeal to investors and how best to structure it.

Property Details:

• Worth: ~$300,000
• HOA: $273/month, Taxes/Insurance: ~$170/month
• Current Rent: $1,880/month (long-term); next tenant advertised at $1,950/month.
• Mid-term rental potential: ~$2,400/month (I haven’t tried this, but it’s my estimate).

My Financing Idea:

• Large down payment: ~$125,000 (This is my priority to reinvest elsewhere).
• Seller-financed balance: ~$175,000 at 4.25% for 30 years.
• Buyers take over taxes, insurance, and HOA.

Questions:

1. 1. Does this structure make sense for investors, or would you recommend different terms to make it more appealing?
2. 2. For those who’ve structured wraparound mortgages, what strategies have you used to avoid triggering the due-on-sale clause?

Thanks for your thoughts! It has been a great rental and would continue to be one but I think I am ready to sell it!

@Josh Young Thank you for the reply! So our mortgage is at 3.375% so it wouldn't cash flow if we did a full cash out refinance. We are strongly considering taking out a second mortgage to purchase the next house and renting this one by the room for $4,300. 

@Lauren Kormylo Those are a lot of good thoughts on it! This home was actually rented by a dentist prior to us buying it but it does not rent out for enough if you do it long term as a single unit for us to afford the next home. And my wife is our realtor. Mulling over thoughts of seeing if someone would manage the rental for us!

@Joey Banasihan Yeah. The timing is killing us on this but we had to have our current home listed to get under contract on the next one we want. Christmas has been brutal for listing this type of property but we did it to snag the good deal on the next one!

@Jamie Banks From trying to advertise the unit as a whole, it struggles to get even $2,800/mo. Renting by the room seems to be the ticket here being right next to the university. 

@Bonnie Low I have looked at insurance placement but didn't et much traction. I need to revisit it along with the Corporate rentals ideas! Have you had any luck with specific sites if I am not in a major city? 

Question for all: Do you think the home would be more attractive to investors if I had a $4,300 rental agreement signed? Or at least proposed? Not sure if I am in a fantasy land altogether! Thanks! 

Hello everyone! I am trying to get some ideas on marketing my primary residence that can be a killer rental. It is a 2,634 sq ft, 4-bed and 3 bath luxury townhome with views in Prescott, AZ. Also, it is a four minute drive from a pretty expensive Aeronautical University and hospital. We put out feelers a number of months back and 4 students/recent graduates offered about $4,000/mo to rent by the room.

One of the identical units a few doors down sold for $669k in December and we listed ours for $645k. No bites yet and we are now listed at our bottom dollar of $599k. If I didn't need the cash to buy our next home I wouldn't dream of selling it because of the great rental potential. And this area has a lot of students with parents who foot the housing bill.

The group of students offered us the numbers below but traveling nurses would probably pay more. Any ideas of how to get this house in front of the right buyers? Lots of parking too! Thanks!!

Owner's Suite: $1,300

Secondary room next to bathroom: $1,200

Bed 1 downstairs: $800

Bed 2 downstairs: $800

Sent from Yahoo Mail on Android

@Christopher Leone Did you ever get a hold of the paperwork for this?

@Zane Cress Thanks for the reply! I have been eating up all the subto podcasts and Pace's interviews for his new book. So I am right there with you! The property just expired and the tax records only show an estate. Any ideas on how to find the executor of the estate/seller? Thank you!!

@Hunter Reed Hey! Thank you for the reply! I have been mulling around how to make this deal work and just checked today and it is expired! The property is owned by an estate and I can't find the seller info. I am new to tracking down info like this! Have any pointers for this?

And it turns out that the owner that passed away bought the property all cash so I am assuming no mortgage. I want to offer $1500/mo interest only with a 5-year balloon (with balloon extension baked in per Pace Morby's advice). Have any thoughts on this? I am hoping the seller is just sick of paying the $500/mo in taxes, HOA, and Utilities. Then they might go for it. Need to find them first!!

Thanks!

Hello! I am wondering if anyone has some creative finance input for my situation. Here it is!

We own 3 residential properties and want to make an offer on a fourth but don't have the down payment and can't or don't want to afford it at the current rates. It is a 4-bed, 3 bath house in a premium neighborhood and has an attached Casita. It has been on the market for 280 days (possibly due to a sewer pump setup??). The owner is a trust representative and might live out of state. Previous owner possibly passed away. Price started at $849k and is down to $699k now.

My wife is an agent but I want to go to the listing agent and say, "I will hire you to represent us so you get the full commission. Can you convince the seller to let us take over the mortgage and finance the remainder of the price interest only with a 10-year balloon payment?" Or some variation on that.

Not sure how to pay the agent commission in this scenario but does anyone have any thoughts or tweaks on how to take this property down? Thank you!!