interesting scenerio

This sounds like it is an interesting potential deal. Do you believe the seller may become more motivated in December if they are out of the area and want to sell it at that time? Could the price drop by waiting?

If you believe you want to try to act now, then consider talking to the current owner and the original seller. Money can sometimes motivate people but be sure to include all people in the deal. The current owner, the seller and you. The deal should be agreed and signed by all parties involved before any moeny changes hands. Also be sure to do your due diligence on the property to become aware of any issues or other liens. Good luck with this potential deal. I hope this helps. Believe and Achieve! - Joe

I agree with Joe, however, if the house was sold to the current owner, what type sale was it. Wasn't it a lease option or lease purchase? I think it might be your best interest to talk to the current owner (right now) and find out what type of sale was done and then go from there. As Joe pointed out, the last thing you don't want is a property with another lien and things could get more complicate from there. You mentioned there's a four months redemption period, and if that's is the case, then the house may have been purchased at a tax sale, where the property usually have redemption period. Find out more info about the property and go from there. Good luck!

LL

Thank you for your reply.I did the math and if I can get it at 6% with nothing down on a 20 year amoritization with taxes and insurance the payment would be 1181.45 per month. That works out to about 1400 per month positive cash flow. He said he would look at a land contract but would prefer to cash out. I figured if I could give him full price on a two year deal and if I could cash him out within 90 days of close I would ask for a 5-10k discount. should I get him to agree to our deal before I talk to the current owners? They recently lost a couple of rentals in a nearby town so I'm not so sure they will even make an attempt to redeem with a couple of months left. Can someone approach them (current owners) even if I lock it up and redeem for them and "back-door" me? The appraised value is 300k and anyone checking the ad that was just listed in the paper will want to find a way to grab this. But with all of the back payments and balance due it will run them in excess of 150k. Thanks again for your advice.

The original owner bought it back at the county building foreclosure sale after the current owner defaulted on a 10 year land contract. The current owner paid off all the existing liens (as of 10 weeks ago) and is now waiting for the redemption period to expire. (Dec) Thanks again for your thoughts! Brad

If the originally owner bought it back from the current owner because it was foreclosed on it, then why he needs a redemption period if he re-claimed what's his? I assume there's a sepreate contrac in place. The land contract and the tri-plexes contract. I don't know all the details whether the contract cover the land and the tri-plexes, but that's something you need to find out more about it. If the price he's offering covers the land and the tri-plexes, then sounds like a good deal, but if not, then you need to find out more before you move forward. Some property owners when they sell their properties, they may sell the property, but not the ownership of the land. It only a suggestion, but if you have all the vital info regarding the land and the tri-plexes, then take action and make it happen. Good luck!

LL

It includes both buildings and the land. I forgot to mention it is also approved for two more tri-plexes to be built on the existing property. I just got off the phone with the original owner and he is willing to sign off on a agreed price now and not entertain any other offers between now and Dec. He did indicate that the needs a down payment of some kind at close (in Dec) so I need to come up with that before Dec. I would think that I should be able to find someone with , say 5k, that i could borrow for six months at 15-20% and pay them off with the positive cash flow? Thanks again! Brad

It sounds like the deal is starting to come together for you. In regards to the down payment, you may recieve a credit for any security deposits the landlord may be holding from the current tenants. Thus, try to request a copy of all the leases to further review as part of your due diligence process. Good luck. Believe and Achieve! - Joe

Thanks for everyones feedback. I'll keep you posted. Brad

Things have become more clear now. Sound like you got yourself a great deal. If i were you, i would try to lock up the deal now and get possession of it now. I suggest that you take control of the tri-plexes now and make it happen. If you can't find any hard money, then use a credit card to secure the property and start renting them out right away. You should take over the property and secure it now, six months from now, the credit card can be paid in full with the cash flow coming in. With the interest rate of hard money between 15%-25%, they're not any different than using credit cards. The only different between hard money and credit cards, the hard money will get their return plus interest, but with credit card, not only that you barrow the money to pay for investment purchases, but your credit rating will also be increased. It's only a suggestion but you do what best for you. Why wait unitl Dec what you can do today. Good luck!

LL

Thanks for your reply. If I understand the law correctly (and this is what the former owner is telling me) in Michigan someone has six months once they are foreclosed on to redeem the property. That is what we are in the middle of right now (month 2 of six) I'm guessing I could go to the people that are being foreclosed on and see if they would walk away but my guess is they are going to bleed every penny out from the renters they can. They just stopped making payments to the person they bought the property from on a land contract. Unlike a bank who wants out from underneath a property and will take a short sale these guys are probably just going to walk away after they get the Dec rent checks. That's what they did with a property they had in a near-by town earlier this year. Thanks, Brad