O.k, I’m working with a seller that is 2 weeks from his house being auctioned off. I have met with him twice, he understands the gravity of the situation, seems very motivated to do something, but I can’t get him to agree on my offers, so we can move foreward. He wants to stay in the house, but I think hes not being truthfull about having a job, or at least the job he says. He’s too risky to keep as a tenant, considering the condition of the home and his shaky payment history. My offer is to payoff both 1st and 2nd, back payments and fees, and get him some of his equity back, but he still won’t commit. And the stress of this whole thing is realy getting to him. I want to be able to get him to see that this is the best option.
This is what the whole thing looks like.
SF 3/2 1460 Sq Ft ranch not too old, decent area, not too bad of shape, lots of potential and big lot, with new construction all over.
58,000 1st @ 10.75% (836 Monthly)
10,000 2nd
10,000 back payments and legals
I offerd to pay off all that, and give him 30,000 at closing
Total 108,000, and a 10,000 note payable in 7 months.
40,000 total for him.
Comps in the area are 205-210 Maybe more.
I just wanted to see if anyone had some advice on what strategy I might use to get him to see the light?
Perhaps instead of a flat $30k, consider giving him a certain percentage of the profits at the end, perhaps 50/50 or something to that affect. Maybe that could help?
What is he least comfortable with, is he not liking the amount you are giving him or just not comfortable in leaving his home? If he isn’t comfortable in leaving his home, you should try and find him another home to purchase on contract or a rental for him to goto with his new-found money. Maybe he just doesn’t have anywhere to go?
Ok,
Well my final offer. I just wanted to see what you guys thought.
20,000 to seller at closing
rent back to him for 6 months while home is being renovated, he will help when needed, and do certain things around the property, provide security. His rent will be 1/3rd of what his mortgage was, to help him get back on track. When house sells, he will get 30% of the back end sale profit ( est. 15-19,000) for his equity. My profit after taxes ( 28,800 - 42,000). My markets a little weird right now. Most folks say you shouldn’t let them stay, but he is a good guy and has a decent job, in fact 2 jobs, just has bad luck, made bad decisions. If he dosn’t go for this offer, I’m on to the next deal. I can’t do any better than this. I hope it works.
Please let me know what you think of this one, thanks guys & gales.
In my opinion I wouldn’t do the rent-back for 6 months. There could be many problems occuring there… I would leave that out of my offer for now but offer the other items. If he stays there while rehabbing it could become a problem with him being upset of you coming in and out randomly while he is living there, not wanting to leave at the end… etc. I would get him out first.