Not sure if this is in the corect forum but here we go.
Here’s the deal, I went into an investment with a builder to build a house on a golf course where I applied for the construction loan (250K) and the builder builds the house. When we sell the house we split the profit. The bank appraised the house for 320k. There are four other houses for sale that have not been sold since completion. The house is finished and up for sale with a realtor. I listed it for 289k and can’t get a bit because it’s a buyers market right now. I have dropped the price to 279k and still can’t get a bit. The construction loan is due in May of 2005 but they said if I need another month or two that would be OK. The payments are about 1,200 a month right now (interest only). Not much room between cost and selling price with the realtor’s cost. I don’t know what to do with it. I don’t want to have to get a conventional loan on it and incur more cost (higher interest rate, taxes, closing cost). If any one has any creative ideas on how to make cake out of horse manure I would greatly appreciate any ideas.
I understand your plight at this moment, I’ve got several empty units in the Fort Hood area, because of this Iraq deal, they’re coming back a little at a time, but then the next bunch moves out. Before the war they were full, with no problems, and the bank expects me to make the monthly payments on the mortgage.
Obviously, as an investor, I can say that someone didn’t do all their homework (I’ve been in your shoes!). As a Realtor I can’t give you any advice ethically. If you were to contact me directly outside of this forum, you would be contacting me, which then I can give you some pointers. I would need to know more information.
Advertise it for sale on a lease purchase without the Realtors involved and use their non refundable option fee to pay the closing costs on a refinance. You may even have a little extra plus some positive cash flow. Then go next door and buy their houses and do the same thing. This may be too aggressive but it is at least a positive approach.
Get busy marketing! Open houses, bandit sides, auctions or any other idea to get people to look at yours rather than theirs. You can use creative financing as suggested. Figure out where the people that buy that type of house hang out. (the golf course?)
Thanks you very much for the ideas. I do like the idea of lease purchase if I can’t sell it. Do you know if there is a big market out there for this type of deal? (interested buyers) I know every location is different. Thanks for your input.
p.s. is LOL for “Laugh out loud” or “Lots of Luck”?
You also might do seller finacing for people with good credit that just can’t get approved for conventional financing at the full appraised value. First mortgage wrap around
Then sell the note to a note buyer and they usually will discount the note and buy it at 90 to 80% of value.
Or you can do a conventional loan for 80% that allows 100% cltv with some one with marginal credit. Then you will have some positive cash flow with the second mortgage note and that way you have gotten out of your constuction loan
There are just so many option that you have don’t feel trapped
you can also get an extention on your contruction loan they will usually say that you can up to a certian amount of time. This way it will give you more time to sell it or do some of these creative idea
The only problem you have will the aboved mentioned ideas with a lease option is that you still will have the contruction loan unless you refi it in to a perm loan and that will eat up some of the equity for closing costs and then you will have more closing cost if you try to sell it so you wil have double cost just something to think about but it is an option.