One of my bird dogs called and said he got a call on one of his yard signs from a couple that wanted to sell for what they owed. I called the lady and she told me they owed 210K for this 5/2 2story ranch house on 1 acre. I sent the bird dog back over to take photos and access the condition. He said it needed 20K in work, deck boards rotted, Patio leaning, needed paint and yard was dead and overgrown, the pool had green water with frogs. The worst part is it was out in the country near a migrant farm town. It did have potential though, huge shade trees, solar hot water system, high vaulted beamed ceilings, nice wood stove and central air and heat and a modern upgraded kitchen. I valued the property 70K less than what was owed less repairs. The payments were $1400 PITI. I told the seller the only way I cud sell this property is with a long term lease option that wud run the term of the loan. She agreed. After several weeks of advertising nobody was buying, plenty of calls and many people looking it over. I called the seller and told her she needs to at least paint the place and clean up the yards. She said, “I will just rent it”. Another week went by, I wasn’t giving up and was still running ads on Craig List, and then seller calls and says shes willing to lower the payments $400 for 1 year and make up the difference out of her pocket. I also reduced my assignment fee from 10K to $7,000 It didn’t take long to find a young couple that had horses and loved the property. They only had $6,000 so I carried a note for the 1K for 30 days. It was a nice payday, the bird dog got $2500 and I got $3500 and another $1,000 in 30 days.
The bird dog was a little angry cuz, I never seen the house, or met the sellers or buyers, he found the place, showed the house 20 times, took my contracts to the seller to sign, and the buyers, went to the Notary with them, cashed the check and drove 75 miles to bring me my $3500 in Cash. All I did was figure out how to make the deal work, negotiated with the seller and drew up the contracts. I think he realized how easy it was. The deal took about 5 weeks and I figure I spent just a few hrs in emails & phone calls. My thinking is, why force the buyers to refinance in a few years? So, this is my new strategy, I’m starting to think I can sell anything. This was really a no money down deal, I even had the bird dog pay the $2 earnest money. I would have paid him 50% but he’s the one that told me how much he wanted. Luckily I had him sign an agreement that wud pay him $2500 Randoskie
I love that!!! That Bird Dog will do this over and over…
Imagine how fast you could make money if the house didn’t need anything…!
Randoskie
How many years were left on the loan?
There was 29 years left on the loan, the sellers must have taken out some serious money because they owned many years.
Interesting. Would you please clarify the terms of the lease option? So it was a 29 year lease with option to buy? And the payments were equal to the mortgage payment?
I wrote up the Lease option contract that buyers will make all payments going forward including Taxes and insurance maintenance and repairs. At the end of the term Title will transfer. The buyers can refinance if they want at any time. One of the concerns was, the sellers are elderly so we had to spell out that the heirs will cooperate in transferring Title.