OfflineFOUND GREAT DEAL....JUST NEED ALITTLE HELP!!!!! I'm renting because I made sure the owner was interested in selling the house to me. The fact are: FMV is approx. $175K - $180K, can buy for about 140K, (current comparible is only about $120K), I can't get conventional loan due to credit issues.
Here's my question(s)...Owner has original Mortgage bal. of $119K and an "Open-End Mortgage" for 18K. What is an "Open-end mortgage"? Will this cause problems with him transferring property to me if he should hold the note or do a lease w/option?
Also, pulling up these docs. thru the Co. records...I noticed a section that reads "If all or any part of the Property or any Interest in the Property is sold or transferred without Lender's prior written consent, Lender may require Immediate payment in full of all sums secured by this Securty Instrument...etc. Does this delete the possibility of owner financing?
Any suggestions for getting around the above? If I can't own the property myself, would the above prevent me from assigning this great buy? What about a Mortgage assumption? Are the lenders these days more willing to let a buyer assume the mortgage if it's obvious the current Mortgagee is headed toward foreclosure? Just trying to decide what "CAN" be done (I'd prefer to own this one)then go from there.
Thanks in advance for speedy response as I've tried looking for these answers on the site and in the books with little luck and I'm to meet with the owner tomorrow. Pls. advise.
Thanks so much,
Phoenx
Have a Blessed Day,
Phoenx
We all are everyday Angels, so why not expect miracles? They're there...have you noticed or made yours today?
Since you are under a time constraint here Donna, my best and only advice would be to seek out a lawyer who deals in Real Estate to run this buy them. Better to spend a few dollars now and save yourself some headaches and money down the road...Jan
PS> This also looks like the owner is close to being upside down on his home. Meaning he owes more than the house is worth. You might want to pass on this and find a better deal with more equity...Jan
my fisrt possible list lease option to buy which on the cragslist.org including www.myface book and www.myspace.com and the onlineclassified ad.
what do i do next when a possible seller respond to the add want to buy or sell. please help need some input.
thank you
If you want to ask a question about your situation you should start your own post for help. It is kind of an unwritten rule not to ask for help on a persons post...Jan
Hi Phoenix,
I am a total newbie here but, I agree with Jan that the owner MIGHT be close to being upside down.
You should definitely meet with a RE lawyer and show him what you have.
Also, please read the following links. Print the 2 articles out and take them to your appointment with your RE lawyer. They might be helpful to you.
They are from Carol Stinson's blog. A student of Dean's.
http://www.realwholesaling.com/?p=159
http://www.realwholesaling.com/?p=323
I hope this helps. Good luck!
DC
Dvorah
Just jump in, make your mistakes-use them as stepping stones and make your dreams reality!
Minor Issue: If the house has a FMV of $175-180K, but the highest current comp is $120K, you need to find out why there's such a big difference. How did you reach the FMV number? It may be exaggerated. If it turns out to be accurate, and the closest comp is $120K, you may be looking at the best house in the neighborhood. You can still make money with it, but not nearly as much as a "up and coming house" in a great neighborhood.
"Open-End" Mortgage: I forgot what that is, but it's easy to find out. Just put that term in any search bar and it will spit out the definition. That mortgage is not an obstacle to what you want to do.
MAJOR Issue: The 800-lb. gorilla in your deal is the "Lender may require immediate payment..." This is called a "Due On Sale" Clause and it's the proverbial iceberg for RE investors! It means that any attempt to transfer the deed to this house (or any part of the land mentioned in the mortgage), or place financing to another buyer (called "subject to" that preceeding mortgage) will TRIGGER it, making the entire balance due immediately. This makes selling the house to a 3rd party before paying off this mortgage MUCH harder, but not impossible. In many states, this also prevents you from "lease optioning" it to a 3rd-party buyer because recording the option will ALSO trigger the "Due On Sale" clause.
You have 2 effective options at this point. One, find an end ALL CASH buyer who can pay in full, so all you'll be doing is an assignment, double close, or IEE deal. Or two, you must consult a heavyweight RE attorney, specifically someone who's comfortable with "subject to" financing. Have your lawyer contact the lender, explain what you're trying to do, and ask to have that clause rescinded. You can always ask the lender yourself, but your chances of them saying "okay" shoot up astronomically if you have your RE attorney do it.
Long story short, you can still make money with this house, as long as there's equity available in the deal. Verify all your numbers to make sure, then get legal representation. Best of luck to you!
Paul: "I must not fear. Fear is the mind-killer. Fear is the little-death that brings total obliteration. I will face my fear. I will permit it to pass over me and through me. And when my fear is gone I will turn and face fear's path, and only I will remain."
Duke Leto: "I'll miss the sea, but a person needs new experiences. They jar something deep inside, allowing him to grow. Without change something sleeps inside us, and seldom awakens. The sleeper must awaken." - "Dune."