4 Plex with No Money Down

Did you need good credit for the owner of the 4 plex to give you a note on the property?
arthur.b

Thanks for sharing your success to motivate people like me to take more action in find deals which are out there in front of our faces.

When you said 10 year note amortized for 30 years. Can you break it down for me what you mean by that?

Did you keep the tenants or you removed them to put news ones.

How did you convince the seller in doing this?

I would appreciate a response to this.

Good luck in your investing

hi i posted what i thought was the correct answer to your question but now it is gone???? the 30 year note due in ten year is a way to keep the payment low. The first ten years of a loan is mainly interest anyway. I am sure he is leaving the same people in place..hope i helped

To expand on what Keith has said here...

When they (seller and Roy) figured out the payments, they figured it out as if the seller was going to finance it for 30 years. That is how the pmts are kept smaller. But at the end of 10 years he will have to get a loan or make some type of arrangements to pay off the balance.

If the tenants have all been there long term and are wanting to stay, that is a good thing. When you have people moving in and out is when you lose money having vacancies while you are painting, cleaning and finding new tenants. Empty apt means no rent. Plus, if you buy a property and the tenants have a lease, you must honor that lease until the expiration.

Since the owner had had the property listed for over a year, Roy knew that he was already in the market to sell. The seller was very probably frustrated because it did NOT sell while listed, so Roy contacted him and probably just ASKED if he (seller) would consider financing.

If you don't ask, the answer is always, "No." At least when you ask there is a 50/50 chance.

Good questions.

Karen

I love owner financing,did three deals this way and never had a problem.
You dont need banks,good credit,job verification you might need low down tho but its 3k and under normally.
Think about it,you can hold and collect rents for years then use equity to buy more properties or sell for profit and never qualify for anything! WOW!

Gotta love owner financing

Aaron-n-Suzy

I appreciate your response

It surely helped

Good luck in your REI

Since he left the same tenants in there, usually the seller is suppose to hand over the lease contract to him (new buyer) am I correct? or is the new buyer suppose to make a new lease with the current tenants since they want to stay?

So I guess it is like a lease option to but for 120 months and by the end of terms the new buyer has to make some sort of arrangement or get a new loan like you said, to refinance it for 30 years which will make his payments lower

Please correct me if I'm wrong

Thanks

I love it.

Thanks for weighing in.

Congrats on your owner financing deals which you have done so far.

Yes, you would just step into the position of the previous owner on the lease with the present tenant. Often, after the first year leases will go month to month.

It is different from a LO. With a LO, you are renting and have the OPTION to buy if you choose but at the end of the time period you can just give it back if you want or are unable to obtain financing. Any option fees or rent credits are forfeited.

In this situation, the seller is acting as the bank, so it is an official sale. The deal with the seller is figured out numberwise as though he is really financing it for the full 30 years and that is what keeps the payments more affordable, with a clause that makes a "balloon" payment due at the end of 10 years.

Karen

yes, this is great, but can you tell me how you intend to take care of the $8,000 per unit deferred maintenance issue? Did I miss something here?

thanks,

Thanks for breaking it down for me to my understanding.

Very interesting thread.
First, how did you find the owner? Was it revealed from the realtor, or did you use some database or public records?
Second, what part of the deal was beneficial for the owner? In other words, why did he/she want to do the deal?
Third, what kind of forms are needed to create a note, and was there a transfer of ownership of the property? What are all of the documents required to make this deal work?
Lastly, did you need to do a closing, or title company, or attorney to do any of this deal?
I find this deal fascinating - thanks for sharing.
-td