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Author Topic: 1st deal with liens  (Read 2109 times)

Offline Maineprofits

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1st deal with liens
« on: July 10, 2013, 12:37:48 pm »
So the seller wants out, he wants a few thousands to get into new apartment, the house  in poor interior but good bones, its a rowhouse. There are about $40k in real estate taxes, gas and  water bills due. Spoke to attorney and he said usually get those down to 1/2. The i ARV is $115k based on 5 sold comps......my question is how to structure the agreement?  should i keep the price at  48k ? What if the liens get negotiate id at a higher price?  am i thinking too much?

Offline javipa

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Re: 1st deal with liens
« Reply #1 on: July 10, 2013, 12:49:15 pm »
I don't see why buying a townhouse worth $115K (less repairs) for $48K is a bad deal.  If you're paying $48K, not including the taxes of $40K, this is a terrible deal.

What's the question, again?
"149 Ways (Plus One) To Find Motivated Sellers..!"  -Free Report-
>>> Click: http://sub2marketdomination.com/how-to-find-motivated-sellers-2/

Offline Maineprofits

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Re: 1st deal with liens
« Reply #2 on: July 10, 2013, 01:07:26 pm »
The 48k includes the taxes.........which could be variable, historically this municipality access 1/2 of the liability to forgive the lien)  the seller wants $4k to walk away. Should i manage contract for $4 or for $48k? I am thinking transfer taxes.....

Offline javipa

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Re: 1st deal with liens
« Reply #3 on: July 11, 2013, 01:06:00 am »
Get the payoff amounts for all the bills and liens recorded against the property, for starters.

Since the seller wants $4K to move, you make the purchase price "Approximately $48,000," and the down payment "Exactly $4,000."  This becomes an "equity purchase agreement."

Now all the closing costs become your responsibility to pay in order to close.  In effect, the purchase price will remain flexible, until the actual closing costs and fees are totaled, paid, and accounted for.

Meantime, you check the title, have the seller deed you the property, and record the deed.

The question then comes regarding the transfer tax.  In my case, I deduct all existing encumbrances from my final sales price, and pay the taxes on the balance.   I don't know if it works this way for you, or not.

Hope that answers your question better this time around.

Here's some things to cover in your purchase agreement:

Sale Price:  "Approximately $48,000.00"
Down Payment:  "Exactly $4,000.00"
Closing Costs:  "Paid by Buyer"
Prorations:  NONE
Existing Encumbrances:  "Approximately $40,000"
Additional Terms and Conditions: 
1.  "This is an equity purchase of $4,000. 
2.  All fees and costs to be paid by buyer. 
3.  This sale is subject to the existing liens and encumbrances of approximately $40,000."
4.  Seller accepts and understands that he's being equity-stripped like a cheap hooker.

BTW, it's not likely you'll get a title company to handle your closing, or insure the property, since you're not paying off the liens, etc.  So, be prepared to handle this yourself.

« Last Edit: July 18, 2013, 07:04:14 pm by javipa »
"149 Ways (Plus One) To Find Motivated Sellers..!"  -Free Report-
>>> Click: http://sub2marketdomination.com/how-to-find-motivated-sellers-2/

Offline Bill H

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Re: 1st deal with liens
« Reply #4 on: July 18, 2013, 04:49:16 pm »
Good post Javipa.

Another way to do the deal is to simply take a 30 day option for XX$$$.  Get all the payoffs on the liens....go to escrow...pay the liens...pay the seller, get the title insured...get the deed....ALL in escrow...done.

 




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