About 2 months ago my parents decided to sell off part of their farm. They had a realtor do a BPO on the house with 5 acres, which came back with a value of $90k-$100K (comps came in at $95K) They decided to sell it outright for $80K, which would pay off their mortgage for the whole 80 acres and the 2 houses on the property (they would keep the other house and 75 acres). Well, my husband and I hated to see the family farm sold off to strangers, so we offered to buy it from them for their full asking price but, figuring we could only get 80% from an investment loan, I asked if they would seller-finance 20% ($16K). They agreed, so I proceeded to apply for a loan from our bank through my new business. The banker asked how much I would need. I explained that the seller would finance the 20%, so she said “Then you’ll need $64,000?” I said, “Why, can I get more?” A couple months ago we had been approved for $85K on another property; a deal that ended up falling through on the seller’s end. So she said maybe they could give us the full amount of $80K. Then I asked, “Well, could we get the whole $85K that we could have gotten before?” (We did have other collateral to support this). She said “OK”. THEN I asked if, since my parents were willing to finance the $16K, could I still get the whole $85K besides, since we had enough collateral to support that loan (even though it was $21,000 more than I needed). She said she would check with the underwriter. She came back with a yes! ALL BECAUSE I WAS BRAVE ENOUGH TO ASK!!
To make a long story short, we all met at the title company today. The banker, the closer, my parents, my husband, and I. I held my breath until ALL the paperwork was signed. And then, you don’t know how good I felt as they handed me that check for $21,668.05 (all tax-free money for me to reinvest!!) AND the keys to our new rental property worth $100,000!! This is also the first official purchase through my new company, “Buyers Match LLC”, which makes it all the more exciting! (And of course my parents are thrilled, too, having their place paid off and knowing the farm will stay in the family. )
I just wanted to share this, because a few months ago I wouldn’t have even known HOW to think creative financing, nor would I have had the nerve to ask for MORE than what seemed reasonable. I’m so grateful to Dean, the coaches, and the people on this site for all that I have learned and the courage I have gained!! I encourage EVERYONE here to use your imagination, and DON’T BE AFRAID TO ASK! Like Anita says, “If you don’t ask, you won’t receive.”
$80,000 purchase price ($85K loan, plus $16K 2nd)
-$629 mo/mortgage pmnt
-$ 80 mo/prop taxes
-$ 40 mo/insurance
Only $51mo cash flow, BUT
also $21,668.05 CASH up front !!! YAY!!!!!
P.S. I also decided today to pull a “CBR”. Since the cash flow from this one won’t be so great for awhile, I am raising the rent on a couple of others that haven’t been raised for a few years, to offset any “unexpected” expenses that might arise with this one. Workin’ it all out. Man, this is fun!