Condo

Hello Scott,

If you can find someone to rent your condo and the income will cover your mortgage payments do it.

Use rentometer.com to see how much you can charge in your area.

Shop around for multi-family properties and ask (every step of the way) if the seller (usually in multi-family is an investor) is willing to finance all or part of the sale. If the answer is yes you most likely will not have to deal with the bank at all!
Angela

I was thinking about doing the same with my house! Renting it out and buying another property to fix up and live in at the same time. Usually they will let you get another loan if you can show a signed lease agreement and a deposit but they would not let me do this... They want proof of rental income for 1 year on the property before they will let me do anything OR 20% downpayment on the house I wanted to purchase!!

So just check in on that before you waste your time trying to find a renter and then find out you can't get another loan like I did!!

Goodluck,
Shaun

The reason I support your idea to rent your condo if you can, is that the price will go up again as we all know, if you can rent in the meantime though and hold onto the property you will be in great shape to sell that condo for a profit dispite what it looks like now.

I think nice multi-family properties are a great idea.

Shaun,
Thanks for the input. This is the best thing about this site, so much experience.
Again, the seller financing thing might be the solution here if you can find it!

Thank you all for your input!

If the seller finances the multifamily, do i technically own it than?

So if I wanted to sell it in a few years, and profit would be mine and not the person financing it because they are acting as the bank.

Is that right?

Thanks
Scott

The seller is the bank!! The only thing is the title is not in your name... You and the seller will have a contract agreement saying buyer is going to pay seller x amount of dollars for x amount of years at this x amount of interest. And at the end of those years the remaining balance of the purchase price is due! But usually you can always pay the seller off sooner then what the contract says with no penalty.

So to answer your question if the seller is going to owner finance you the house for 100,000 for 8 years or so and in 2 years you find a buyer that is going to buy it for 120,000 you can sell it pay off what you owe the original seller and pocket the rest of the money!

Hope thats not too confusing! I don't usually explain things very well!! lol...

Thanks,
Shaun

The seller is the bank!! The only thing is the title is not in your name... You and the seller will have a contract agreement saying buyer is going to pay seller x amount of dollars for x amount of years at this x amount of interest. And at the end of those years the remaining balance of the purchase price is due! But usually you can always pay the seller off sooner then what the contract says with no penalty.

So to answer your question if the seller is going to owner finance you the house for 100,000 for 8 years or so and in 2 years you find a buyer that is going to buy it for 120,000 you can sell it pay off what you owe the original seller and pocket the rest of the money!

Hope thats not too confusing! I don't usually explain things very well!! lol...

Thanks,
Shaun

The seller is the bank!! The only thing is the title is not in your name... You and the seller will have a contract agreement saying buyer is going to pay seller x amount of dollars for x amount of years at this x amount of interest. And at the end of those years the remaining balance of the purchase price is due! But usually you can always pay the seller off sooner then what the contract says with no penalty.

So to answer your question if the seller is going to owner finance you the house for 100,000 for 8 years or so and in 2 years you find a buyer that is going to buy it for 120,000 you can sell it pay off what you owe the original seller and pocket the rest of the money!

Hope thats not too confusing! I don't usually explain things very well!! lol...

Thanks,
Shaun

Thats great thank you.

Could you just clarify what you mean, when you say, what I still owe to the seller?

Thanks

Scott

It will be like you paying off your mortgage earlier then 30 years. You buy a house for 100,000 based on a 30 year term at 6% interest. Your payment (not including taxes, insurance, etc) will be 599.55/mon for 30 years. The owner is going to carry the loan for 8 years. So after the 8 years is up you will owe him the remaining balance on the loan which will be $87,772.41... This was just using simple numbers and things... I figured all these numbers on the calcs and tools page and used the monthly mortgage calculator w amortization.

Hope this helps! Let me know if you need more info!

So I would have to pay it off in 8 years right?

That is what the contract is saying, so that is what I would have to do.

Where do I get that 87,772.41 from though if I don't sell it?

Would I have to sell it than?

If I finance it for 100k, and sell it for 120k, thats a difference of 20k.
I owe him 87,772.41
How am I suppose to get that money?
Am I missing something here because I'm still a little confused.
sorry...lol
Scott

So, all i would do is take 120k minus what I owe, 87,772.41, which is 32,227.59.

That would then be my profit.

Thats right, right?

Scott

Yeah you pretty much have it! If you have not sold it after your contract is up and if you don't have the cash to pay it off you have to find financing. Bank, Hard Money Lender, or some other way!

You might get really lucky and get an owner that says I will carry for the full 30 years!! That happens very very rarely but you never know!!

I have a question off this subject.

With and I.E.E. I know my profit is the difference between what I paid for the property, and what the new buyer will pay me for it.
How much equity is in it.

But with assignments, wouldn't it be the same thing. My profit would be whatever equity is in the property?
I've read about collecting a finders fee for an assignment, but if an investors or buyers finders fee is $500, or $1000, why does it make sense to assign it to them if there is say for example 20k of equity in the property?
Wouldn't I get the 20k of equity as if it were and I.E.E.

I know assigning is used with buyers that have cash or financing already lined up, and I.E.E is for people that need financing.
But I'm still wondering about this part of the process.

???
Scott

The only way you would give your property to an investor for a finders fee is if you didn't lock it up on contract! You just call up an investor and say hey there is a nice property I found here is the address and if they buy it they pay you a finders fee... This process is kind of hard sometimes b/c your not promised your money! You can easily get screwed out of getting anything.

But if you find a house that has a bunch of equity in it you should def lock it up and try to assign it for 5,000 or 10,000!!

Thanks for clarifying that for me.

You are really being a great help.

Scott

Not a problem Scott!! Just let me know if you need any help on anything at all!