Selling a low end house (by MMIT [VA]) Oct 7, 2021 9:30 AM|
Selling a low end house (by myob [GA]) Oct 7, 2021 9:39 AM
Selling a low end house (by Deanna [TX]) Oct 7, 2021 10:22 AM
Selling a low end house (by plenty [MO]) Oct 7, 2021 12:21 PM
Selling a low end house (by Nicole [PA]) Oct 7, 2021 1:20 PM
Selling a low end house (by Roy [AL]) Oct 7, 2021 2:15 PM
Selling a low end house (by Ray-N-Pa [PA]) Oct 7, 2021 2:46 PM
Selling a low end house (by S i d [MO]) Oct 7, 2021 3:04 PM
Selling a low end house (by 6x6 [TN]) Oct 7, 2021 4:59 PM
Selling a low end house (by MMIT [VA]) Oct 7, 2021 8:04 PM
Selling a low end house (by Roy [AL]) Oct 8, 2021 10:20 AM
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Selling a low end house (by MMIT [VA]) Posted on: Oct 7, 2021 9:30 AM
I am thinking of selling one of my low end houses.
This is a house that I do not enjoy owning or renting. I have had problems with every tenant that I have had in the house.
I bought the house with cash for $20k about 6 years ago. A landlord who has several houses in this neighborhood offered $50k. That landlord does not mind the drama that comes with this neighborhood. That offer seems fair considering the condition of the house (dated but in good condition) and the neighborhood.
The house has a current rental certificate from the city.
The house rents for $1050/month. There are a lot of section 8 renters in this neighborhood. The house would easily pass a section 8 inspection.
This landlord likes the OPM (other people’s money) concept and will probably ask for some type of owner financing.
If I do owner financing, what interest rate would I use, length of the loan, down payment, balloon payment, title in their name or do I keep the title in my name, etc.?
Selling a low end house (by myob [GA]) Posted on: Oct 7, 2021 9:39 AM
no owner financing. unless you plan on getting it back-- which is also a plan. --99.103.xxx.xxx
Selling a low end house (by Deanna [TX]) Posted on: Oct 7, 2021 10:22 AM
If you want to sell it, sell it and be done with it.
Around here, owner financing is only what people want to do when they want to sell a place 10 or 20 times. --137.118.xx.xxx
Selling a low end house (by plenty [MO]) Posted on: Oct 7, 2021 12:21 PM
you have my permission to sell, pay here, no owner financing. just take the money and put in into something you do enjoy.
Selling a low end house (by Nicole [PA]) Posted on: Oct 7, 2021 1:20 PM
Since they are apparently a long time investor, do a general background - is he over leveraged? Are taxes and municipal assessments paid? Law suits other than landlord/tenant complaints?
I'd ask for $15,000 or $20,0000 down - enough so that he doesn't walk later. $1,000 or $2000 is nothing when he is bringing in $1000+ a month. At $1050 a month, he's bringing in almost $13,000 a year. With putting very little down and not paying the bills, he could walk away with about $10,000 in his pocket at the end of the year.
Deed in your name or his would be dependent upon your state's laws on how you would take it back. Deed in his name absolves you of everything regarding the property (unless he's not paying the assessments or making major required repairs). Deed in your name still means you get letters for overgrown grass, you are responsible for slip & fall, etc. Make him pay taxes, insurance & municipal fees to you monthly and you pay the actual bills.
Put a balloon of whatever makes you comfortable. Have a monthly payment that is doable - out of $1000 first comes taxes, insurance, fees, upkeep, and then debt service so you need to know what his "net" will be. Interest should be a minimum of 9% adjustable upwards every 2 years until balloon. A lot of the lending rules won't apply because he's an investor, not a home owner.
You will need to be fair. You want to sell ... he wants to buy. Make it work. --98.237.xxx.xx
Selling a low end house (by Roy [AL]) Posted on: Oct 7, 2021 2:15 PM
A $20K house that rents for over a $1,000/month? I would be drooling over that one. You need to keep that one. --68.63.xxx.xxx
Selling a low end house (by Ray-N-Pa [PA]) Posted on: Oct 7, 2021 2:46 PM
1/3 down and 5% rate for the first six months of the note
then it goes up to 5.5% for the second six months. Have the rate go up every 6 months there after.
You need to incentivize them to cash you out as quickly as possible.
I wouldn't be too afraid of lending money to another investor - especially one with lots of assets --24.101.xxx.xxx
Selling a low end house (by S i d [MO]) Posted on: Oct 7, 2021 3:04 PM
A $50,000 house for an experienced investor with multiple houses is nothing. If he likes "OPM", he can use the bank's money just as easily as get you to owner finance. He can probably get it on a personal loan or maybe cross collateralize it with another of his homes since it's such a small balance most banks may not want to mess with it.
If you do decide to be a sweetheart and not send him pleading to the bank to make a dinky little loan, then make it a "happy/happy" deal. That means, you're happy if he buys it or happy if you take it back. That means LARGE down payment ($10,000 min); LARGE monthly payments ($500 P&I minimum); and you escrow taxes and insurance with the payment (add another $100 or so per month).
I would also consider a LEASE with OPTION to purchase or a LAND CONTRACT. Keep title in your name, so that if you need to get him out it's quick vs. a foreclosure.
Then just hang on and hope he doesn't allow tenants to destroy it, which is a very real possibility in these neighborhoods. At least with $10K down, you're paid off from what you have into it in less than two years. --108.230.xxx.xx
Selling a low end house (by 6x6 [TN]) Posted on: Oct 7, 2021 4:59 PM
Are you going to do a 1031 or pay taxes?
I am with Roy. --73.120.xx.xxx
Selling a low end house (by MMIT [VA]) Posted on: Oct 7, 2021 8:04 PM
Roy, there was a murder last week 1 block from this house.
Last month, a lady was found murdered in her house up the street from this house.
My house that burned down earlier this year was 2 blocks from this house (arson).
As I get older (66), I have less interest in dealing with this neighborhood.
The guy who is interested in buying the house is same age as me. He has houses in this neighborhood and does not mind the drama.
I am not doing a 1031. I will pay the capital gains tax and use the proceeds to do a Roth conversion - while it is still allowed.
Thanks for the feedback! --70.188.xx.xx
Selling a low end house (by Roy [AL]) Posted on: Oct 8, 2021 10:20 AM
I did not realize this house was in a 'war zone' which according to me is pure Class F and I would probably sell it too. I had assumed it was Class D and I can handle D hood drama but not the F hood drama which you gave vivid details of.
I would only do owner finance in a Class A, B and maybe a C hood. With this one you need an all cash buyer but that may not be much more than you paid for it. Houses in these hoods do not appreciate,...they are only good for cash flow and that assumes you have a paying tenant. --68.63.xxx.xxx
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