Author Topic: Perfect opportunity except I don't have enough money.....  (Read 1614 times)

my4fireflies

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Perfect opportunity except I don't have enough money.....
« on: May 10, 2017, 05:06:08 AM »
A man in town is selling his home. It's a one-room School House built in 1752. It has running water but no bathroom just an outhouse LOL it's set on .7 of an acre down a dirt road surrounded by Woods. It's 970 square feet exactly what I was looking for when we downsize as the children leave our big home. He's desperate to leave he'll take less than $40,000 I think it's a perfect opportunity for me to stay in this town that I love and be able to downsize but I have no money saved I'm on the last leg of paying off my credit card debt. My intentions are to own both homes for a couple of years paying off the small home and fixing up the large home and then selling the large home and moving to the small home. This the *exact* plan I have been hoping for but I don't know how to buy a property with no money. (My savings is only $750! As I am putting all extra $$ on debt. I've paid off 42k in 2 years.)   does it make any sense to take out a personal loan for the down payment? Also I don't know how to buy property without a realtor. Any suggestions? This man is desperate and wants to move out of state like yesterday. First offer grabs the deal.  any thoughts or suggestions thanks in advance

highflyingstache

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Re: Perfect opportunity except I don't have enough money.....
« Reply #1 on: May 10, 2017, 08:37:37 AM »
The world is not static. Your plans are constantly modified by outside forces, interest rates, bank policies, GDP and jobs, government policy, your community and the individuals around you.
You can look at the fluid movement around you like many do; a complete shock when you get in that minor car accident, shelling out a couple thousand, never expecting it to come their way. We have the numbers, something like 50% of American's can't deal with a $1000 emergency, 75% can't deal with a $2000 emergency. However these movements around you, outside of your control are not meant to be just problems and money you shell out to stop bleeding; they're opportunities as well.

In this case your plan is a certain direction; pay off all debt, thus all your money has been going that way. However, things have changed. An opportunity has come up, right now! This, on your part, demands action or possibly inaction. The same could be said when I go thirft shopping or watch the online buy and sells. Some fantastic opportunities, many things I ignore. More often than not I walk out empty handed.

The question, I answer myself is by making a short list of things that will need replacing or wanting in the near future. When I go out, should I find such a thing, it could be worthwhile. Every so often there are things outside of that range, but I don't really need much in life, typically.
So if this has been on your mind for some time, look at it as an opportunity. The question now becomes, could another version come up quickly enough, or ever? How long are you willing to wait, what quality is this in? If it is that desirable, if you think you'll only find this one, that opportunity could be necessary. You very well could need to modify your plan. Take on some low cost debt to take up this opportunity (mortgage through the current owner, separate mortgage, tack on to your current house mortgage, for $40K, maybe even a line of credit with a low rate may suffice). Knowing you'd be diligent, this could be paid off quickly.

Before I'm heckled, let's math. You buy this for $40K now, or instead wait until the stars align. Paying interest on $40K over 2, 3 years, versus that waiting game, perhaps finding the next home for $50, 60K, even with cash in hand, the changes in potential appreciation, rental ability, or just the balance of the later costs to the interest payments now, may actually make it worth it.

This is a similar business tactic you'll see with many wealthy folks, they'll jump on a great opportunity for a low interest rate, pay it off in time, but make the worth in the moment of. Opportunity doesn't wait, that's for sure.

My final thought, have you considered talking to him into some form of mortgage, explaining your situation, your interest in the house? An open discussion may be well worth it; see what he's willing to look at doing with you. A slow payment for him to get out of state may be worthwhile.

my4fireflies

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Re: Perfect opportunity except I don't have enough money.....
« Reply #2 on: May 10, 2017, 09:08:36 AM »
Oh my gosh. You just made my day. Yes! This is something worth looking into. This is not a fly by night whim. I have had my eye on THIS particular property for a few years, first it was a just a dream. A few years ago he was asking around 80K. Know I g that it needs a septic and bathroom, that seemed out of the question. He told a mutual aquaintence ​ that he wants 40k, but would take less.

my4fireflies

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Re: Perfect opportunity except I don't have enough money.....
« Reply #3 on: May 10, 2017, 12:43:05 PM »
Just got off the phone with him. He will take 20K.

Megma

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Re: Perfect opportunity except I don't have enough money.....
« Reply #4 on: May 10, 2017, 05:16:06 PM »
You said you've been paying off debt, how much debt do have left? This is a key question on if you can buy the property at any price. Since there's no bathroom you also can't rent it , I wouldn't think, while you wait to move in without significant additional investment.

My finance's parents did something like this, bought a property next to their life long best friends to retire to, about ten years before they were going to retire because it was for sale. We actually lived there for a while and they rented it for a few years also.

tralfamadorian

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Re: Perfect opportunity except I don't have enough money.....
« Reply #5 on: May 10, 2017, 05:52:45 PM »
...down payment...

... needs a septic and bathroom...

...will take 20K...

Most lenders will not give a mortgage for a home not in livable condition, of which a septic is one of the requirements.  Also, loan amounts of less than $50k are difficult to come by.  Combine the two and it's almost untouchable from the standpoint of traditional financing. 

Ask the seller to do a lease option (you rent it from him for a year or two, then are able to purchase it for a previously decided upon amount) or seller financed loan (seller functionally acts as the bank). 

Thedudeabides

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Re: Perfect opportunity except I don't have enough money.....
« Reply #6 on: May 14, 2017, 07:30:19 AM »
$20k? Perfect. Ask him if he'll do 100% seller financing. If he will, get it under contract!


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Thedudeabides

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Re: Perfect opportunity except I don't have enough money.....
« Reply #7 on: May 14, 2017, 07:32:16 AM »
$20k? Perfect. Ask him if he'll do 100% seller financing. If he will, get it under contract!


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Oh and seller pays closing.

Most banks aren't going to do a $20k loan anyway so he has limited options.