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Subject:  Re: GA Deal I'm working... Date:  2/24/2006  12:46 PM
Author:  Dwdonhoff Number:  7667 of 14302

Hi JodyNRoy,

My first question when I started to try to decipher this thread (which is getting waaay too complicated for 1:30 a.m.) is:
How did you end up with a deal in Georgia, as far away from Washington as you can get? and what part of Georgia is it?

The owner contacted me from my online classified advertisements (remember, I do less than 5% of our firm's volum in my home state.)

The deal isn't far from Macon.

BUT, if the real value of the house is $150K tops and she's accepting a price of $160K, and knows it will take her FOREVER to break even on equity, does she even realize that if she needs to sell one day that the 7% (standard in Atlanta) RE commission will also come into play, unless she short sells to an investor, in which case she defaults to you and possibly the mortgage co.?

Yes, we've gone through the possiblities. All I can do, however, is make an offer that makes the best sense I can.

For you, I see no risk. Even if you have to pay $125K for the house, you'll have roughly $12-15K profit immediately ($134,5 from the lender, plus the broker commission plus her $2500 earnest money) and as much as $35,000 more than that and the $125/mo income as long as she stays in that house.

LOL... you're saying you see no risk IF EVERYTHING WORKS PERFECTLY!

Well OF COURSE you see no risk in THAT case.

In the cold, hard world of reality, there are unforeseeable potential risks... and they'll bite you in the butt every single day when you least expect them.

You have to plan for the unforeseeable.

It sounds like a wonderful deal, and we'd all like to find something similar, but IMO, you could price it AT market, instead of above market, and everyone - ESPECIALLY you, will still be a winner.

Why, in your business opinion, would it make sense to NOT ask to be compensated for arranging for her to own at payments equal to (or below) that of someone with perfect credit?

THAT is what the sales price premium compensates me for. And I am most DEFINITELY at risk of ever actually seeing that premium. As you point out, she could go BK, or into foreclosure, or have some future buyers choose to short-sale again, cutting me out entirely.

"No Risk" indeed... the only time there will be no more risk is when this deal is completely off my books, checks have cleared, title has cleared, and Georgia has fallen to the lower half of the states in real estate fraud (attracting attorneys looking for actionable litigation.) The fact that this is in GA makes it (on it's own) RIFE with risk.

Yes, you've made a deal that "works" for everyone, but especially you, and I'm sure she's feeling like this is her "only chance" at homeownership so she'll accept any terms you offer.

Why "especially" me? If it doesn't work for me, I go away, she gets evicted. Does not get to stay, does not get to pay as though she had 740 credit scores, does not get a mortgage history... Isn't this "especially" working for her too?

I hope it works out for everyone, but if YOU manage to get a break on the price, I hope you'll consider giving her one.

If I succeed in winning a discount, nobody's "giving" me a break. Every dollar will have been one that I've earned in a long study of finance, law, and psychology.

ANY discount below general market is compensation for learning how to acquire it.

I could (namkato apparently thinks I should) evict the tennant and simply sell immediately and book my cash.

Any premium I get by "pre-selling" the home with a future value reflected in the 2nd lien I carry back (flapping in the wind... basically an "unsecured loan" that may never be repaid,) is compensation for the risks I take in being "the good guy" and keeping the tennant in place at my own risks.

good luck

Much appreciated! I'll take every ounce of the stuff I can find!

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