Posted by John Behle on January 25, 2002 at 18:55:34:
In Reply to: creative advice please posted by Steve P. on January 18, 2002 at 22:50:58:
Well, in my mind it isn't much of a deal either. It's only about 10% below market based on the lower of the comps, but would pretty much require cash - unless there is flexibility with your sellers.
The biggest error new paper buyers or creators tend towards is to try and over mortgage properties. Paper buyers aren't that much more flexible - and usually less flexible than conventional buyers.
If you have a mortgage up to 75-80% of property value and try to create saleable paper on top of that, it isn't going to be very easy or even possible. You are looking at 25k cash if the seller isn't flexible as to taking some paper that they hold long term.
I like the rate and would consider this for a flipping deal if I could put less cash in and sell it at a higher rate on a wrap, but otherwise, there isn't much to work with here.
The way I look at it is you find a very flexible seller and use creative techniques to create a better deal or solve a problem. Most people try to use creative techniques to make a deal out of one that really isn't worth the time.
If there is flexibility with the seller as far as holding some or all of their equity in paper long term secured by this or another property, then there is something to pursue. Otherwise, I would look for a better deal.
Have a great day, John