All Forum Posts by: Tom C

Need some advice on a possible deal.

I found a desperate LL that needs to dump 3 SFR all near each other due to relocation out of state. I am working with his friend who is an experinced LL and helping him sell these homes. We are going to sit down Saturday and try to work out an arrangement most likely will have to go land contract. Here are the numbers.

Was asking 59,9

Estimate appraisals 23K, 23k and 30K per home

Willing to take 45K

Combined taxes are 77.00 per month
Combined Insurance 120.00 per month
Combined water and trash 90.00

Monthly Payment ?

Combined Rents 1250.00 per month

It sounds like I might get away with no money down, but my fear is that he is going to ask too high of a monthly payment to meet the 50% rule. I'd be willing to go as high as 600.00 per month. My dilima is that this is a great chance to pick up some fairly nice cash producing homes and is it worth the risk to go higher on the monthly payment to get my foot in the door temp. until I can pull a refi and pay him completely off which mostly we would work a ballon payment at 3 years? What would a typical monthly payment be on a land contract with no money down in this situtation?

Fred,

I am not sure what you are trying to accomplish. Yes, when I was a kid would put lime in the outhouse. Are you just trying to clean it up before you have to jump down in there and fix your problem?

All Cash,

I know you didn't mean that to be funny, but it was. These are same agency's that has allowed 2 landfill's to pollute my neighborhood for years, cause homeowners to get sick and cause the evacuation of a local school more then once due to harmful gases in the air. We finally got the one shut down only after hiring a high paid law firm out of Chicago. Don't for one minute put the EPA or the Health Dept up on a pedestal to me.

My local health dept and our local EPA has been in the back pockets of big business allowing them to dump toxic chemicals into our rivers and leach agent in our back yards for over 20 years, all while they want to soak the little home owner who is simply trying to sell his house and move to a better life. Up until 4 years ago we never had an issue with being forced to replace our septics. Then all of a sudden our county discovers a new money making opportunity and they jump at it. This regulation has decimated my community and has caused hundreds of home owners to drop their keys off at the bank and walk away from their homes.

We are simply looking for a way to get potential homeowners into these homes verses letting them stay vacant and turn into a rat nest. I understand completely what you are saying, but as a former cop when laws, policies and regulations become unreasonable and unworkable, you have find loop holes to get the job done. There has to be a way to do this to protect both the buyer and seller without having to replace the septic before the title transfer.

Thanks

Here is the situation. As I mentioned previously, we are running into a major issue with our septic regulations. Apparently, by doing a quit claim deed verses taking the traditional route, buyers are able to temporarily avoid having to deal with a septic inspection and replacement. This seems to work if you can do a quit claim and then lease, land contract or rent the home to an individual. The problem will come in is if when you are ready to sell the home the traditional way, then you will have to deal with the septic Nazi's.

I am assuming this works simply because it's not rolling across the desk of the individual who is responsible for stopping the title transfer before the septic inspection has taking place.

We have a big company in the area purchasing blocks of notes and they are doing it by way of Quit Claim Deed, they then land contract the property out. They did not even know that there was a septic issue here until I spoke with them the other day. I didn't realize that it could cloud the title for future title searches.

Are there any restriction on doing a Quit Claim Deed? Such as, can I require on cash deals that this is done verses normal title closing? I believe the only problem is if the buyer was using bank financing, then they would require the normal closing process?

I discovered a loophole if I can make it work.

Thanks

There are many out here. You just have to search for them.

http://forums.biggerpockets.com/viewtopic.php?t=11762&highlight=

Stand your ground now or when you do get married you will regret it. Tell her straight up. Its not going in her name.

Here is the problem though. The retail value has changed dramatically. I just looked at 3 SFR tonight. Landlord wanting to get out of the business. He is asking 59,9. The homes in my opinion are worth maybe 12 to 15K a piece. He on the other hand has them rented out at 450 per month and basically has sucked them dry for 7 years with little repair. He still thinks they are worth 20K and maybe last year there were. I feel it's very hard to judge retail value right now, especially in depressed areas.

I wouldn't pass it up. You'll have 20K in it with CC and rehab. The numbers are a little tight, but if you manage it correctly and as Re asked, they pay all utilities. I'd do it.

An inspection was necessary and when they came out they did find some type of problems. I am not sure what they were. It is not or wasn't a county requirement just a couple months ago. I believe I need to place a call to the electric company and find out what the deal is. This will have a major impact on homes that I purchase in the future.