Need Advice / No income / Stuck with house

Help please.

I lost my job and have no income.

I have no bills besides insurance and tax luckily.

My house is paid off and valued at 320k.

How can I make the money money out of it?

I live in Texas where lease option is illegal.

Is owner finance the best option?

The house is fully furnished with nice stuff.

Would ideally like to put the furniture in the deal.

Any advice is appreciated.


First off, lease options are not illegal in Texas.

Second, you’ve got a place to live, and you’ve got a roof over your head. Most people I know would be glad to trade places with you …and remain unemployed.

You could rent out three bedrooms and move into your garage. That’s probably worth $1,500 to 2,000 a month to you. Plus you’ve still got a place to live, pay your utilities, and scrape by, until you can figure things out better.

Meantime, you’re mulling over a stress-relieving, short-cut to homelessness. Bad move.

Go find another job. Work “full time” finding a job, until you find a job. In this climate, or until Mitt Romney takes office, or you live in Virgina, or near new natural gas plant, it’s going to take a full time effort finding a job. So just bite the bullet and work somewhere.

If that’s too difficult…real estate is certainly not your answer. Just saying.

I would say good luck, but I think “Find a job” is a better admonition.

I don’t understand your problem. why is losing your job making you to sell your home?

You need money for food, utilities, property taxes, living expenses and insurance. So isn’t it better to find a new job and/or rent out rooms than to sell your property?

If you must sell, just hire a real estate agent. Then rent a room yourself until you can get a nice paying job. However, I think selling your home is an overkill based on your situation.

ditto on that advice, why on earth would you sell if your house is paid off? You would probably take the money and live off it until it’s gone. go to home depot or lowes, they have great benefits and they need all the help they can get, at least at the stores I have been to, which is many…

Thanks for the advice. Working a job just seems like the easy route though. I’d like to avoid working if at all possible. What if I sell it Owner Finance and ask for 40k down. I bump the price 30k so that I’m left with a 310k note. I can charge 8 per cent interest and take home $2200 a month income.

Doing that method I made 30k cash in hand with a $2200 income which might be better than Lowe’s.

I can take that 30k and by a 2000sqft trailer home cash and wait for the buyer to default or refinance.

True I’d sacrifice standard of living/ but I think working a job sacrifices it more.

Aren’t we investors here?


Yes, probably most of us offering advice are investors. And that’s why no investor worth his salt is going to recommend that you use your personal residence as a self-liquidating source of income.

OK, I understand what you are thinking now. Another thing is to create a lease option where they can lease it for 2-3 years at low rent with a non-refundable 30k option fee. That will give low monthly income and you can do the same thing while not compromising your equity. However, I suggest you sit with a financial planner and an accountant and see if you sold your home and bought an RV or trailer for 30k, how you can invest your money in order to get high returns and a monthly return.

Yeah, that question threw me off. Without another investment vehicle, you will burn through the equity within a short period of time.

I’m appalled by the horrible advice I’m receiving here.

" I’d like to avoid working if at all possible. "

I think this is the problem…if you are asking investors for advice…you are asking a group of people that work their a$$es off to make stuff happen.
I can’t imagine not wanting to work or do something…
Sorry but…daytime television just can’t keep me occupied that long…
I do lease options in TX exclusively, so you can do a lease option, but you may want to look at an owner finance with 5% down and 7% or so on the rate plus ins and taxes.
You’ll be surprised how hard it is to find someone with 10% down, but…it can happen…but…
So…let’s assume you are cash flowing a whopping $2k per month…big freaking deal…
I think the bigger point here is that you want just enough to survive so you can wait to die…
Instead of selling the house, why don’t you look to build a new business, create multiple income streams…
Otherwise…you owner finance the house so you can watch Wendy Williams…

Here’s my plan…

House appraised for 320k could sell for 360k if I offer financing.

My terms 40k down

320k note @ 8% interest. ($2,348.05 P/I)

First 2 years are almost purely interest so my principal doesn’t go down.

Attach 2 year balloon to protect my principal.

Take 40k buy a house like these cash

Enjoy a tax-free income and wait for the home to refinance or default.

Either way rinse and repeat.

Side note about working… I don’t want to work if I can live a real estate investors life full-time.

Yes I like the idea of starting businesses and I am working on my next big thing. (Last deal got me this house cash but didn’t last)

I’d like to have a modest income and a modest home to work out off for business.

Now someone tell me what’s wrong with this plan?

OK, I’ll take another bite. “Aren’t we investors here?”

Yes, and theoretically speaking, you could use your house as a down payment on an under-performing, income-producing property. You could even move into the project and become an onsite owner/manager.

If you were able to leverage yourself into an under performing property, you could raise the rents, and/or increase the occupancy, and thus increase the project’s value exponentially. Then you could leverage yourself into yet more under-performing properties, and do the same thing you did the first time; offer to collateralize the next purchase with equity from your first income property.

Do that two, three, or four times, with ever larger properties (or the same size…) and you could conceivably go back and buy another $300,000 house for cash using borrowed money from your existing income properties …and actually thrive, until they bury your smiling face …without ever having had another day job.

I did this exact thing using $240,000 of equity from a rental house I owned, by trading deeds and equity with a seller in return for his under performing income property. He actually gave me two deeds in return for my deed. It required no credit, additional cash, or bank qualifying, etc.

That’s very ambitious plan…needless to say i think its an awesome idea.i just need to be able to identify those type of properties you mentioned. I don’t have the apartment management experience or the income to handle any major problems. using my house asa down how much apartment etc do you think i could obtain? 3 million would be nice…

Your solution is equity driven, therefore the negative aspects is risking all or part of your equity for limited gains. Renting out rooms until you can find a solution to move out and collect rental income is the best solution.

Equity driven, i dont quiet see what you a
r e getting at. How am i risking my equity?

If someone is going to put 40k down i think they are serious about owning the home and i get to write the contract. Are you just trying to use your sub 2 voodoo on me?

:shocked :biggrin Hey, I’m not opposed to thinking big. However, like I told thedonaldjr a few days ago, who has $2M in liquid cash, he should start small, learn the business and slowly turn that $2M into …$7B…! Why not?

Theoretically, you should be able to leverage yourself into a $3M property. That’s 10% down…! If you don’t involve a bank, it’s especially possible. It all comes down to your sales and negotiate skills.

A combination of things is also involved in order to accomplish this, which includes the seller’s motivation level and/or the seller’s trust in you. The more motivated the seller is, and the more you know what is motivating the seller, the better you can tailor a custom solution and close. However, exhibiting confidence in your ability to solve the seller’s problem goes a long way to getting to a yes.

When I bought my first apartments, I had zero experience with multifamily management, but having years of single family management experience, gave me the confidence I needed. However, I would have simply hired professional management and then breathed down their necks until I understood what they were doing, and then fired them.

Meanwhile, I jumped directly from a small collection of junker houses to a 30-unit building in one day. I didn’t crawl from duplexes to four-plexes to 10-plexes to something else. I just bit off a chunk and started chewing. Of course I had somewhere to live and some income. However, I also found a steal deal, and seller financing, even if the terms sucked drain water.

For me the real money is made by forcing appreciation on multifamily residential projects. So, that’s why I suggested something like that for you.

I gave you an option, but frankly it might be wiser to get a job, and then search for a deal like this. Otherwise, it could take months to uncover this special situation as I’ve described.

BTW, real estate investing is NOT a full time job. Otherwise, it’s given me the ability to spend time with you here.

That all said…it’s better to start small, and crawl up to a $3M dollar building. Otherwise, it’s like balancing a marble on the head of a pin, if you don’t have experience under your belt.

I remember Barny Zick once remarking, “If you’ve got nothing to lose, then why not take the risk?” In your case you’re still risking your only asset; your house.

You might consider offering temporary collateral based on your performance. This way you can release your house from any liens if you do what you say you do over a period of time. However, your most critical time is the first two years, so take it for what it’s worth.

I might say to a seller:

"Mr. Seller I'll give you 'x' for your property if you finance the transaction. To make you secure about the deal, I'll give you a lien on my house for $300,000. After two years of on time payments, we'll move the lien back to your property, or something else I own of equal or greater equity value. Sound good?"

Hmm, epic post… thanks. You’ve really opened my eyes to a great opportunity. I was thinking I could look for someone looking to retire. I couldn’t see why someone would be satisified with just a lien. It’s good collateral but wouldn’t they want a tangible down payment as well? Any chance you could share some of the contracts you use on these deals?

The question about what a seller might do, or not do, is not the question. The question is, “Are you willing to ask for what you need and want?” Otherwise, you’re negotiating with yourself. Worse, you’re convincing yourself that asking a seller to accept your free and clear house as collateral won’t be quite enough, or tangible enough, collateral. Really?

If I was a motivated seller, and someone made me an offer that simply required me to carry financing for a while, and the buyer suggested I could lien his house to secure the deal, I would be all over this. Frankly, I’ve been this motivated to get rid of a property before, and would have thanked my lucky stars for terms like that. So, don’t second guess an answer, just ask the question and then deal with the answer.

You need to develop a skilled negotiating approach. You ask for everything thrown in, including things you don’t really need, or perhaps even want, and then trade down until you get what you’re really after.

So, you might ask for the stars, and settle for the moon. If you can’t get the moon, then you ask for a collection of satellites. If you can’t get the moon, or a collection of satellites, then you ask for a jet. If you can’t get that, then ask for the crop duster. If the seller can’t give you the moon, won’t give you a satellite, refuses the jet and the crop duster, then it’s time time to ask for the airport. Finally, after all that negotiation, the seller caves and throws in the airport.

And viola, you now own a fee-charging income producing landing field. All because you kept asking for things to be “thrown in” for the seller to reject. Meantime, the seller is satisfied that he negotiated the best deal possible in throwing in an airport without having to give up the stars, the moon, the satellites, the jet, and the crop duster.

Of course that’s ridiculous! But the fact is, you wanted the airport, and could care less about the moon and the other “crap.” If you asked for the airport up front without building a front porch for the seller to kick stuff off of, the seller would have shrugged, and said, “If that’s what you want, forget it.”

Meantime, you’ll achieve whatever you believe is possible, regardless of the belief. So it’s important to remain open to possibilities, so that when a seller says, “yes” to your offer, you won’t flinch and set out to sub-consciously undermine your position.

I don’t offer/recommend contracts here, because mine are state-specific and illegal in at least two states. :shocked :anon :evil

However, uslegalforms is a great source for standard, state-specific, real estate contracts. That is, if you don’t want to get a uniform copy from a commercial real estate agent where you live.

Okay I think I found a potential deal.
$675,000 27 Units

Old widow MUST sell 27 units including an onsite manager’s unit absolutely beautiful!
Will Carry w/$275 cash down 6% interest 5 yrs.
Absolutely beautiful property in pristine condition.
No deferred maintenance.
Built in 1997, rebuilt in 2007. 8/1bed/, 8/2bed, 11/3bed/2bath.
Park like setting on 2 acres.
Building 23,560 square feet +/-.
Currently has only 50% occupancy.
Not fully rented even though renovations complete.
Badly under-performing property with scheduled proforma income of $150K.
Current expenses are $30K.
Vacancies due to economy.
Seller finance $275k down at 6% for 5 years (using AITD).
Must have $275K of cash for downpayment.
Gorgeous property.
No banks, credit report or apprasials
REAL seller finance as Owner is retired

Downpayment seems high perhaps for 675k price and only 27 units.