I called the gas company in regards to the whole mess with the natural gas (actually, propane) situation. The lady there said that since I'm working with a RE agent, my agent would need to call their office and speak to their office manager. She didn't want to divulge too much information, but what I gathered was this ... HUD evidentally never transferred gas service from the original owner to them. Not sure if this was an oversight OR because the old owner has a "substantial" outstanding balance due for gas service.
I told my RE agent the details, and she emailed me late yesterday to say she is trying to contact the rep at HUD to straighten the mess out. Now, I'm only guessing, but I would imagine HUD has to settle all past due accounts before marketing their properties - but, again, this is only a guess. If so, someone there dropped the ball. If it comes down to me having to pay the bill, I'll definately try to work out a tit-for-tat kind of deal. This was not disclosed to me, orally or in writing, before I went into contract, and I would hope I could get reimbursed - if it comes to that.
Stay tuned ...
Yet Another Prospect
I've had a property in my "prospect" list for about a week now, but haven't really looked at it very much. Yesterday, I decided to get serious with it and either keep it or toss it. The listing says its a "Preforeclosure" deal with "Special" and "Easy" financing. The MLS ad was pumped up a lot, too. I looked at the listing agent's web site, and it appears he is a Realtor/Investor. This kind of put a sour taste in my mouth, but I thought I'd email him anyway to find out the details of the "special/easy" financing. He responded saying that particular property already has 4 contracts on it (what BS! - you either have one or none - I think he meant 4 offers), and it required $12,000 down in order to have owner-financing. He also said he has a lot more houses just like this one he could sell me. I responded with a simple:
Okay, thanks.... and thought nothing more about it until this morning. I'm thinking now that maybe, just maybe, I could work out a Weekend Millionaire type of deal with him. IOW, if the numbers work, I could offer him slightly more than asking price, but on my terms. The asking price is $90k, so I'm thinking something like $95k with only $5k down, financed through the seller for 0-2% for 30yrs with no prepay penalty. I could then do a L/O with $5k down, and the owner can make my payments and leave me with $50-$150 cashflow per month. And, if the T/B'er exercises their option, I pay the original seller and pocket the difference. Again, though, I first have to run numbers to see what, if anything, would work.
2 comments:
I sent the listing agent a preliminary offer on the property I spoke about in this blog entry. Here are the details I gave him:
His List Price: $91,000
His Financing: $12k dp w/seller-carry
My Offer Price: $95,000
Downpayment: $5,000 (5.26%)
Finance Amount: $90,000
Financing: 30yr Seller-carry @2%
I also stipulated there would be no prepay penalty on the financing (meaning I could pay it off anytime between the time I close and 30yrs), and this was based on all the usual contingencies.
I figure I'll either get one of the following: a nasty reply, no reply, a counter-offer. I'm thinking it will be probably be the latter AND with some pretty harsh terms.
BTW, the numbers I ran has me with a small, but positive, cashflow, an IRR of 42% after tax, and a resell profit of $25k (moderate case - after 5 years).
And this was with a striaght rental. The figures would be higher for a L/O.
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