4-Plex Counter Offer
Even though I thought the 4-plex deal was dead and buried, I guess I should have at least expected a counter offer to my original offer (see previous post). The owner countered the terms on the 2nd (owner carry) loan, which tells me right of the bat that he is motivated in unloading the property as he said he would be hardpressed to use owner financing at all on this deal. Here is what his counter offer says (verbatim):
"Both parties are each paying their own fees/costs of any kind. Have seller take remaining 20% (*1) in form of 2nd position lien with interest rate of 7% amortized for 5 years with a balloon due no sooner than 30 months. Payments (*2). Also if Buyer's property sells on or before closing, Seller wants (*3) CASH.(*4) Property is being sold as-is where-is with all improvements Buyer (*5) has already done.
1, 2, and 3. I left out the dollar figures.
4. This clause needs some explaining ... When I sent the offer to the agent, I explained to her that I had hoped one of my other investment properties (i.e., House #1) would have sold, which would have meant me having funds for the other 20% of the purchase and closing costs. What the Seller is saying is that if my property DOES sell on or before we close on the 4-plex, I am to give him the 20% in cash.
5. I think the agent meant "Seller" here, not "Buyer".
The agent (or Seller or Both) must also be using a different amortization calculator than any I've seen. When I plug in the principle amount (*1), interest rate (7%), and term (5 years), I get a figure about $12/mo HIGHER than they quoted (*2). I'd definately have to get that straightened out before agreeing to anything. As it is, it's about twice what I was willing to pay each month for the 2nd loan. It's not a deal killer, but I need to crunch my numbers again to see if it works.
I'm also still waiting on the pictures I requested late last week.
House #1 Tenant
Well, here it is almost 4:00pm and I still haven't received anything from the lady wanting to rent the house. She promised she'd fax me the lease application first thing this morning, but not only have I not gotten a fax, but I've also not heard from her at all, which worries me a little. My wife made a comment to me at lunch today that her procrastination in getting me the lease app may be a sign of how things would evolve when trying to get the rent check. I have to agree. I may just call the lady back and tell her "sorry".
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