WWGRMD?

Serious What Would GRM Do question:

I spend $100.00/month on a storage unit and was looking at spending $300.00 to rent a garage to work on projects. About three miles from the trailer park we currently house our largest investment in there is a foreclosed or distressed property on at least three acres (possibly five). The house is a three bedroom two bath home that needs to have the roof replaced and a LOT updated. Next to the house is a 900sf pole barn as well as a 300sf shed. There is a hand painted sign out front that says $500.00 down $300.00 a month. A quick call to the number gets me a date with the owner later this week and a tidy bit of info, the cash asking price is $21,000.00.

I can go to the bank for the mortgage but I am concerned they will be a little skittish about loaning above asking price so the repairs can be started. I can afford to spend the time to work on the house long term, I have the added benefit of having a live in finish carpenter and all of his tools willing to trade labor for rent (he babysits too!)

Do I:

• Take advantage of the owner financing and pay as I go on the upgrades?
• Just try to get a loan for $50k and pay the $250.00 per month if approved under these conditions.
• Buy another Miata.

Thoughts, ideas, suggestions...?

Check with a bank. If you can work something out with them, go for it. If you can't, see what the exact terms of the owner financing are.

Chances are the property sans the structures is worth a good deal more than the $21,000 asking price to a bank.

The owner will finance this. Trust me.

Go to the bank after you own it and have made some improvements. Make sure you structure the loan with the seller that his loan will take a second position to the bank's (if you can).

However, don't drag out the initial repairs. Get the roof done, improve the curb appeal- mow the grass, paint, and get rid of eyesores in the yard. You will gain value instantly, and be in a MUCH better negotiating position with the bank. IF you need to at that point, you can pay off the owner financing.

What is the tax assessment?

Will not know until monday-tuesday.

Mrs. Brown did not lock me out of the house for considering this, she might actually like the idea.

Agree with SVreX. Go with the owner financing LISTEN CLOSE: GET THE DETAILS IN NOTARIZED WRITING!!!!! Fix the roof post haste, clean up the property, then go pester the bank for a mortgage to pay off the owner financing andfinish fixing it up. Rent out the current chez Brown, maybe rent to own. FWIW, you could move the current chez Brown to the new property and then rent it out, gets the trailer park out of the picture.

^^^What they said.

You're in an enviable position. DO IT!

The house is a three bedroom two bath home that needs to have the roof replaced and a LOT updated.

What updates do you need? tearing wallpaper off, paint, trim, basic bathroom overhauls, and doors is easy. Gutting the entire electrical or plumbing is hard.

Overall I would move forward with it.

Check the foundation!! Try to find out the real reason he is selling so cheap. Try to find someone that can check it out (for free if possible) for other structural issues. After all you wouldn't buy a car that was a complete E36 M3 hole would you?

While I'm more comfortable with the idea of bank financing, I'd investigate the owner financing. Get his entire financing plan spelled out on his paper and have a real estate attorney take a look at it. No matter how savvy you are in such matters, there's always going to be a few detail that you either underestimate or completely overlook.

It's worth putting the car hobby on hold for a few years to get into a good house.

VanillaSky wrote: Chances are the property sans the structures is worth a good deal more than the $21,000 asking price to a bank.

This...

Have the property appraised first - probably cost you <$100 out of pocket to have a Realtor appraise the home and acreage. My guess is that you would probably get pre-approval for a loan of whatever the property is appraised at if you have decent credit or any cash to put down. Asking price doesnt really factor into anything with regards to how the bank will evaluate the risk of the loan on their end - it boils down to what your lending history is (your credit), the FMV of the item being put up as collateral (the property), and any cash you bring to the table. the kicker is you dont have to take the entire value of the land - if the market value of the home is $70k, and the guy only wants 21k, you can take a loan for $50k and the bank doesnt have to know what you plan for the balance, that is up to you.

My advice is to let a Realtor look at the situation and give you their advise.

Woody wrote: While I'm more comfortable with the idea of bank financing, I'd investigate the owner financing. Get his *entire* financing plan spelled out on his paper and have a real estate attorney take a look at it. No matter how savvy you are in such matters, there's always going to be a few detail that you either underestimate or completely overlook. It's worth putting the car hobby on hold for a few years to get into a good house.

This is how I financed the Compound, almost word for word, except I forgot to put the car hobby on hold

Realtors are not appraisers!

There's so much more mis advice in the above, but I don't have time to correct it as I'm headed to church. I'll post later today.

1. Get it appraised by an apprasier (not just a realtor). This will give you a much better idea of how much a bank might loan you.

2. If you go with the owner financing, get a real estate lawyer to look over all paperwork carefully. You especially want the option of an early payoff in case you go with a bank loan later.

3. If you go with the owner financing with the idea of bank loan later, make sure you document any improvements you make before applying for the bank loan. You need a "build thread" complete with pictures.

Another thought, Make sure he is the real owner. There have been a lot of scams going on down here with people renting/selling houses that are not really theirs but have been in foreclosure for a while.

Well....I hate renting and bought my house at age 22.

well worth it.

This is an absolute no brainer. LAND, a house, a shed, and a pole barn for $21k? BUY BUY BUY! Owner finance it for now, and make sure there no penalty for paying the loan off early. A lawyer, or title attorney is who would draw up the closing documents and terms. I would get a good survey, this will tell you more than an appraiser can. You will also want a VERY thorough title search/insurance policy. this would be the only way you could lose the property. (aside from defaulting on the loan)

I assume this out in the sticks for that kind of price. This means you can do the work on your schedule without permits and save yourself a TON of cash. With that much land you could be able to parcel off some of it and sell it or rent it. Maybe build a new house for you, and rent the old one? You could build a nice 1000 sq/ft garage with a loft above...live in it while you renovate the old house. An owner occupied renovation is one thing, but if you start any kind of new construction I would do it on the level with plans and permits.

carguy123 wrote: Realtors are not appraisers!

apologies, you are right, but MANY are...my realtor is also an appraiser, so I mistakenly said realtor.

I wonder how many bodies are buried under that pole barn?

DeadSkunk wrote: I wonder how many bodies are buried under that pole barn?

depends on how involved Margie was with pouring the pad, and how many Vendors were not paid up on their ad-space that month...

jhaas wrote: This is an absolute no brainer. LAND, a house, a shed, and a pole barn for $21k? BUY BUY BUY! Owner finance it for now, and make sure there no penalty for paying the loan off early. A lawyer, or title attorney is who would draw up the closing documents and terms. I would get a good survey, this will tell you more than an appraiser can. You will also want a VERY thorough title search/insurance policy. this would be the only way you could lose the property. (aside from defaulting on the loan) I assume this out in the sticks for that kind of price. This means you can do the work on your schedule without permits and save yourself a TON of cash. With that much land you could be able to parcel off some of it and sell it or rent it. Maybe build a new house for you, and rent the old one? You could build a nice 1000 sq/ft garage with a loft above...live in it while you renovate the old house. An owner occupied renovation is one thing, but if you start any kind of new construction I would do it on the level with plans and permits.

Somewhat correct. I am currently at a crossroad between 4 communities. Mason is on my address but it is about 6 miles away and is the largest with about 25,000-35,000 people, Leslie is equal distance from Mason and has about 10,000 people followed by the 8,000 people in Dansville 8 miles away and 1,000 people in Aurelius 4 miles away.

Aurelius is a stop sign with a zip code and library. The house is 100 yards from the stop sign max... There are 100 properties or so in financial despair within a five mile radius. Either the people have lost them or are losing them. The township has few services and very low taxes. The property sits between two recently updated houses one is going through foreclosure auction the other has had the same owner for 25 years. I spoke with the man today and he said three years ago the original property owner passed and left the property to his son who did nothing with it ever. The house was left with no power last winter, the neighbor was kind enough to use the key his neighbor left and shut off the water but he was amazed that everything of value was taken from a previously very nice home. About 6 weeks ago the sign was placed on the house. He was considering purchasing it but the restoration of his current home left him a little short.

I am considering buying it with the owner financing if there are no tax or title/deed issues. My father in law lost his house earlier this year and is staying with us. He is a tradesman and once we were to put a roof on it he would love trading labor for our current trailer. He gets a new home and we get a refinished home.

I will be going into this cautiously, I do not trust the situation with the son. But who knows, he may be selling it just to get out from the tax burden.

I will know more soon.

back in 81 I bought my house from 3 brother's whose parents died and left it to them. 2 of them were living in the house the third was in a diferrnet area. They had no housekeeping skills and the place showed it. Took us six months of nights and weekends worth of work before we could move in, but worth every minute of it.

Long story short, bought the place with owner financing and lower interest than was current, 10 year term, but my down payment had to be the right amount so they could divide my monthly payment evenly by 3. house was 24K, forgot the down, but payments were 300 per month.

Suggestions, get a good lawyer to handle paperwork and complete terms of loan and to take care of title abstract and search, it worked for us with no issues.

Good Luck

I honestly wish a situation like this were available when our home search began. We live in a nice little neighborhood in a suburb of a small historical City. It is quiet and peacfull, and taxes arent terrible. The house is pretty good, if not a bit smallish, but its in decent shape, and is a payment we can afford.

However, we can only just afford it. Weve reno'd it pretty extensively, and we are to the point of investigating costs to add on. Our lot size is small and theres no room for a workshop, let alone space between our home and the property line to add a driveway to get projects/tools back there. The "village" I live in is tight about zoning, so adding a standalone structure would require a variance, not to mention would leave us with very close to absolutely zero yard space.

I say all this because there is actual envy shooting out of my eyesockets as I type. I think a situation like youve found could be completely fortuitous and could really be the start of something great. I realize that the only reason the option exists is because there are a lot of people in the bad shape economically, which is unfortunate. But I would literally punch a nun to get my hands on land like that with breathing room, both in terms of property and budget. I really hope it works out!

If you go with bank financing and tell them this is not going to be your primary residence, be prepared for a LOT of hassle. We jsut went through this with the duahgters home.

An appraisal cost us $350 and you don't pick them any more. They come from a pool. Unless you just want this done for your own edification.

As had been said, check the foundation. If the roof is that bad, check for water intrusion and mold.

I can sympathize with 4cylindrfury about the spacial limitations, while I am extremely satisfied with my home, it is also a close propertied community and I am built out to the max right now. What I wouldn't give for a usable oversized garage and a full basement. I do have a small detacrhed garage but it's at the end of a single 100' driveway where all the cars must be kept. And with 5 driver's and 3 nonrunning cars it's impossible to get to the garage, do even ask about the musical car game that takes place everyday. Just remember, "space, the final frontier" doesn't only apply to Star Trek