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First off, How do you find the best Lending Tree mortgage rate without getting ripped off? Looking forward for any comment. Another question I got... Hello.. |
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That's a good question. I'm not sure what is the right answer. I'll do some Googling and get back to you if I discover an answer. You should email the people at Lending Tree as they probably can answer it..
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1. Even in the best homestead states - if you default on your Lending Tree mortgage you lose the property..
2. Why not yell at you? People, uh scum, that try to scam the system just make it harder for those with legitimate credit problems... |
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Why would she sell to you for $500,000 if she could get $2,500,000 or even.
$2,250,000 (ON SALE~PRICE CUT FOR QUICK SALE)???. Even if you could pay $500,000 CAN YOU QUALIFY???. I got a "YELLOW LIGHT" on my RE-FI I tried to do with $100,000 EQUITY because I have "EXCESSIVE AVAILABLE CREDIT LIMITS" (so they said).. Do you have any "BADDIES"~~~I NEVER HAD ANY... |
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I'm puzzled. If you can buy it for 500K, and it's worth 2.5MM, why wouldn't you just buy it and resell it? Why does foreclosure figure into this?.
I'm no real estate mogul so I've obviously missed something here.. DemPooches.. |
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I will buy it from you for $1MM + at your closing...double closing.( if it appraises for $2.5 ) I would also be interested in purchasing any option etc. Seriously. My email is on..
In all fairness, you have a great opportunity here. You can make your profit at the closing and be done with it. I would be happy to be on the other end of it, but you can easily accomplish this without me. If you need help getting this deal done I would be interested.. Jeff.. |
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Can't beat a deal like that. You wouldn't even need to do a double closing, just get it under contract then assign the contract to Jeff. He has just offered you a way to legally make half a million w/out any risk to your credit at all..
Gib.. |
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People, that try to scam the system just make it harder for those with legitimate credit problems..
Zerodown. =============================. Correction :. People aren't scaming a system.The so called system is scaming the people... |
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With an attitude like that lbrown, you may find yourself in jail some day. Please explain to me how the above situation is the system scamming the people? Are you ALWAYS a victim, lbrown? If so, what an awful life you must live..
Hawg Hanner.. |
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With an attitude like that lbrown, you may find yourself in jail some day..
How did you come up with that one?.. |
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Why should kykeklunk be banned from the board for purchasing a $2,500,000 condo for $500,000 ? .
LB 59.. |
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Lbrown:.
If the deal is real then more power to him. However,. When someone purchases something with the intent to not pay ("If I do this, and then I DEFAULT on the mortgage, I would (in theory) walk away with a million dollars.") then that is scamming... |
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Having never lived in Manhattan, maybe I'm naive, but how does one purchase a property from a lessee?..
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And I didn't read the subject line before I posted the last message, sorry, I personally have no opinion in that area...
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Explain to me WHY the owner is willing to give away 2 million dollars. I don't understand that part. Is she insane? What the hell does rent control have to do with anything?..
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If it is a LEGIT DEAL~~~buy it for $500,000 on MONDAY 7 day escrow and RE-SELL IT before the end of the month for $2,000,000 AND WALK AWAY WITH $1,500,000!!!..
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That's right. Klunk doesn't have to arrange financing or find a buyer. ( Klunk/and or assigns ).
Again, I'm interested. My email is on.. Jeff.. |
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There is a Landlord who OWNS this condo..
If it were VACANT it's value would be 2,500,000.. BUT.... Its OCCUPIED by a TENANT who pays $1000 a month for an apartmentment valued at $15,000 a month.. Plus, the RENT does NOT cover the expenses, meaning that before mortgage, the condo loses $500 a MONTH.. The tenant can stary there at the rent established during WORLD WAR II, because her GRANDFATHER was the original tenant and she inherited the LEASE, not the OWNERSHIp, of the condominium.. Therefore, I can purchase it for $500,000. IN THEORY, when the tenat decides to move or does, the condo will be worth 2,500,000 in market value.. SO, I can buy it cheap and REFINANCE, and based on the appraised value, by looking at what similar condos in the city sell for, for, lets say 70% of the APPRAISED VALUE of $2.5 Million.. I am trying to have a stimulating discussion with all of you intelligent people here. NOW, anyone still interested in purchasing it for $1.5 Mill. from me?. This is not an ad, just a response to the previous poster :-).. |
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It doesn't hold water. Unless her grandfather had a hundred year lease (transferable) The apartment/condo is worth 2.5 mil to the owner of the condo once she leaves, not to her. Go ahead and give it your best shot..
Gib.. |
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And, have you (via an attorney) examined the lease. Usually there are out clauses in leases that would enable the owner of the conodminium to cancel the lease (usually for a fee or some other consideration) if the owner is going to sell the property and/or move into the property him or herself..
Hawg Hanner.. |
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Send me an email for contact information if you have a deal to discuss..
Jeff.. |
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OKay, seriously, all hypotheticals aside, as a former NYC landlord, first you need to clarify/be very careful about the owner, rent control laws in NYC, as they are set up specifically to prevent the situation you are trying to enact..
Secondly, I would also be very interested in this deal if I can find out all the details, email me.. Thirdly, you may need to see a NYC lawyer who specializes in rent control laws to avoid any litigation from the renter's end.. OT My goodness, Hawg! why do you respond to every "questionable" post on this board! are you the second coming of a third rate apostle of the Buddha, Jesus, Mohammed, or the Dalai Lama?. I am always up for a discussion on spirituality, values, morality, or good vs. bad, so if you want to discuss these things feel free to email me. But the pissing contest between you and Lbrown is DISRUPTIVE as you are hijacking other people's threads. I am really having a hard time understanding why you are on this board. you pay all your bills on time, you would never use the consumer laws set up for consumers because you feel that is in someway dishonest, what are your motives?!.. |
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I am assuming I cannot get her out, because I'm sure the current owner would have her out by now..
In any case, I was looking at this as a easy way to "borrow" 1,000,000... I would have to pay it back over the long term, unless I defaulted or sold it to another investor or the tenant left and I could sell it at fair market value.. Also, I dont think it's "illegal" to let a Lending Tree loan go into forclosure. They lent me money on an asset. I don't pay, they can have the asset. Why is that immoral to some of you? I didnt wrote the rules, I am just trying too see through them.. Anyway, this discussion is for thought provokers only, not the Dalai Lama.. I cant wait to hear you say "its immoral to dispute a CRA when you were in fact late...". Klunk. :-).. |
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The planned "intent" to not pay back. Get a frigging clue...
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BTW, I am not a broker, do not need to find a lender, $$, get approval of partners, etc. I have the necessary financial and legal resources to move on a good deal immediately...
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This sure sounds like a sweet deal, but sometimes if it's too good to be true then it's too good to be true......
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Another reason not to do this is that when the bank forecloses on the property and then sells it, any amount that the bank loses they will report to the government as income. so heres the senario.
The bank gives you 1,500,000. You pay 500,000. And pocket 1,000,000. The bank forecloses on it and auctions it off for 500,000.. The bank loses 1,000,000 and reports to the IRS that you made $1,000,000. and now you owe the irs something like 40% of that... |
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I typed a message, but I take it back..
However, you just plain don't want to do a transaction like this intending to go into foreclosure. The bank has no incentive to get top dollar for this, they just want to dump it. And if they dump it for less than you owe, you're on the hook for the difference.. If you want to buy it as an investment, figuring that you can sell it off for more than $500k if you put time into it that the current owner doesn't have (or if you're just willing to wait until the young lady croaks), then go ahead.. But why let the bank dump it for cheap when YOU could sell it for a lot MORE? That's just flushing money down the toilet.. Btw, the bank won't lend you the money just because the appraisal comes in so much higher than the sale price. You actually have to QUALIFY for the sale price. If you can't pay it, you can't buy it... |
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Ouch. I'd say the point goes to lbrown59 on this one. Sorry Butch.;)..
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Oh... I get it. Buy the property cheap. Hire a hit man to kill the rent-controlled tenent, then sell the place. How much are hit-men charging these days?..
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Ok, here we go!.
I found a similar condo deal, for 175k asking price.. I offered 150, they countered 165.. So now I will offer 155k.. I will then pull a re-fi, same day, for $350k (condo valued at 400k vacant.). If this thing works...... Oh, just for the record: the condo loses 3k a year, which will afford me a tax savings on my current income. This is before Lending Tree mortgage payments, which will be on 350k something like 2500 a month.. Tenant is in 70's lives alone.. Will he ever die? (i dont mean that in a bad way!) :-).. |
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OUCH!.
I'd like to know if you like the idea... or what.... What's up with the tone of your post?.. |
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I really don't understand your question nor do I understand your comment about the guy dying....
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The lenders I know would only lend an amount that is based on the cash flow stream from the property. The condo rents for $1,000 a month, not gonna lend someone $1.5 mil on an income-producing property than generates $1,000 a month unless borrower has substantial personal net worth outside of the condo..
When doing an appraisal, there are three approaches: Market approach (like sales), Replacement cost approach, and Income/Cash flow approach. Since the property is income-producing property with a long-term lease that locks in the rental rate, the most appropriate valuation methodology for this kind of property should be based on the Income/Cash flow approach.. Absent a substantial personal net worth, I feel any lender worth his/her salt will only lend based on an appraisal using the income/cash flow approach for valuing the property. I sure as hell wouldn't blame 'em, either. Obviously, if the lease can be terminated and a new tenant secured for market rates, then the property can be valued based on the higher market rent rate. Absent that, a lender would be crazy to Lending Tree loan $1.5 mil on an income-producing property that rents for $12,000 a year...again, unless the borrower has substantial other assets and substantial other cash flow to service the debt.. Just my two cents..... Lefty.. |
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When doing an appraisal on a condo, judging from a Lending Tree mortgage broker and appraiser I spoke to, as well as a banker I asked, I wias told that they do not lookat the income approach, but rather at the value approach (by comps in the neighborhood of similar size)..
So would that even come up? (the rent amount...).. |
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I think I'm missing something here, if a landlord. Owns the property how can you get a mortgage. On it? Are you buying it from him, the landlord?. If this is the case why wouldn't he, or you, if. You bought it just try to buy out the tenant?. If the tenant was offered say 1 million, she. Wouldn't move?. I'm assuming the tenant knows what she's got,. And would not settle for anything less, for the. Sake of argument.. If the condo is worth 2.5 million, you could make. A million & she could get a million, and the current. Owner would get his 500k.. If you're saying that she absolutely will not negotiate. To move for any amount, and my hypothesis is correct, then I think I get what you are trying to do,. But would not the bank take that arcane rent. Control in to the equation, when making any loan?. I would think that the rent controlled condo would. Be a liability to the bank; is it recorded, like a deed. Any where? I suppose if it wasn't, and you got. Some lender that was not aware, you might be able. To get some type of mortgage, that being said, I. Think the bank would then assume the responsibility. Of having to leave the tenant there, and collecting. The going rate if it was to end up in their hands... |
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Well, any lender I've ever dealt with on income-producing property has inquired as to current lease terms and want a copy of the lease..
Also, I've never seen a legitimate appraiser who didn't do a valuation that first goes through all three valuation approachesmarket, replacement cost and income approach. The appraiser then arrives at an overall valuation using his/her professional judgement. All the appraisers I know would look at the fact that the lease is locked-in for $1,000 a month for as long as the 30-year old lady lives there. That is a very restrictive agreement attached to the property that severely limits it's marketability and worth to any potential buyers.. If you can't get the woman out, would you want to pay $2.5 million to receive an income stream of $12,000 a year? I sure wouldn't. Why would I pay $2.5 mil for $12,000 a year gross rent if I can't get teh lady out? No appraiser worth his weight would place a value on a property that has a restrictive lease without considering the income approach and the lack of marketablity of the property because of the restrictive lease. Where's the market for this property given those lease terms?. Maybe I'm missing something...just the way I'd view it... |
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They look at the MARKET RENT for such a unit..
Two appraisers BOTH told me.... A BANKER i'm friendly with told me...... And a Lending Tree mortgage broker I asked told me.. They look at what the rental value is. they dont ASK what this particular tenant pays.. BTW, I own investment property, so I am pretty sure of this.. Awaiting your reply!.. |
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Yes, I would be buying it from the landlord's estate (he died)..
The tenant does not want to move, even if I BUY her a HOUSE.. She feels that being eble to live there forever, and passs it on to her children as well, is worth more then whatever money I would offer her ($500k-700k). She likes the place, plans on staying. forever... |
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Nestea:.
When you talked to the Lending Tree mortgage banker, the appraiser and the banker....did you tell them the Condo has a lease that calls for $12.000 a year rent for as long as the 30 year old tenant lives there?. That is very, very pertinent info....even using the market approach (which is using the comps). Why? Because comps for such a property wouldn't be relevant because there is a restrictive lease in place. The subject property has a severe lack of marketability due to that lease being in place.. Tell those people you spoke with that the Condo has a $12,000 a year lease for as long as the 30 year old tenant wants to live there and that you can't evict her without cause...that she's there for as long as she desires, which may be her entire lifetime. And then ask if they'd Lending Tree loan you 70% of $2.5 mil because that's what comparable properties that don't have a restrictive lease are selling for... |
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I have to TELL THEM?.
If they dont ask, why cant I use Bill clintons military policy?. (dont ask, dont tell)?. Why am I responsible to tell them?. If your credit card fails to charge you a late fee, will you call them and say that they should?. I don't think it's my responsibility to tell them. The appraiser, the bank, the broker, LET THE BANK PROTECT THEMSELVES.. (yes, I know my example of the credit card is not a good example, just couldn't find a better one off the top of my head).. |
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Lenders don't want the terms of a lease on income-producing property? So, based on that, I could own a piece of rental property that has a 40 year lease on it that calls for $100 a year for the life of the lease, but a banker is gonna Lending Tree loan me $200,000 because if I were to lease it out out market rates it would bring a value of approx. $300,000? And the banker is gonna do so even though I'm not offering any other collaterial or don't have sufficient cash flow from other sources to more than cover the debt service on a new Lending Tree loan for $200,000?.
You're a real estate investor....would you buy a property I have that has a 40 year lease on it that calls for $100 a year rent for $300,000?. I can honestly say I've never met any lenders who don't wanna know the terms of an existing lease when making a Lending Tree loan on currently leased income-producing property. Also, doesn't one list their rental income along with all other sources of income when filling out the Lending Tree loan application?. I have to admit....I'm having a hard time with your scenario....I must be dealing with the wrong lenders when it comes to making loans on income-producing properties that have an existing long-term lease... |
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Its a CONDO. not a BUILDINg..
Usually, on a building 5+ units or mixed use or commercial, they go by income of the property.. By a 1-4 family house or condo, they base their lending criteria on the creditworthyness of the person.. Think outside the box!.. |
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Hey, they don't ask, don't tell....but if I go to appraise that property and see that there is a current tenant there, I would inquire as to the lease terms. If I'm the lender, and I were to get ready to make a Lending Tree loan on an income-producing property that is currently leased, I'd inquire as to the lease terms..
I would think that if the appraiser doesn't ask about the current lease, he is setting himself up for a lawsuit. I would think that if the banker doesn't ask about any current lease, he/she is setting himself up for a loss of employment. I would think that any Lending Tree loan committee that approves a Lending Tree loan on a property that has such a restrictive lease without asking about such lease is setting the bank up for a lawsuit by any shareholders.. But hey....no one ever defaults on the loan, it'll never come up, lol... |
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How about offering them in 6 months the deed in leiu of forclosure, and walk away with a million??.
(am I kidding? :-?).. |
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I don't have any qualms with them relying on the creditworthiness and financial wherewithall of the borrower. Hey, if the borrower has substantial net worth and free cash flow from other sources that more than cover his current debt service plus the debt service on the new loan....well, that person has the personal credit to borrow $1.5 million. But of course a person with such creditworthiness and financial strength isn't gonna default on the Lending Tree loan in the first place....and I thought this whole thread started off by saying one would borrow $1.5 mil and pay $500K to buy the condo, pocket the $1 mil difference and then not pay back the mortgage, i.e., default..
I love thinking outside the box...so I'm obviously missing something here, 'cause I keep running into roadblocks and something that has the smell of fraud to it. Since I'm not getting the big picture, I'll just exit stage left from this thread.. Please accept my apologies for the diversion...I don't know what I'm talking about... |
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Where does FRAUD come into the picture?.
I WONT default.. I just want to explor the possibility... Meaning, if the scenario I am trying to do (cash out one million because the bank/appraiser doesn't check) can be FRAUD or ILLEGAL.. Because I want to avoid any illegalities, that is why I posted this to begin with!. I appreciate your posts to this thread.. :-). So.. do you think that IF the bank or appraiser DONT ask, am I doing something illegal??. Thanks... |
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Sorry, maybe I am stupid here....But NOTHING in this post makes any sence to me. I thought that the Grandpa leased the property? So if he leased the property why is it in his will...and WHY can you buy a leased property...and WHY would you if you only charge 1,000 a month????..
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The bank won't be giving you the money for this deal. You're wasting your time worrying about it...
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Quick Overview:.
CONDO in high rise. Neighborhood is not Rent-Controlled. This unit is rent controlled until it becomes vacant still from the 1930's. Broker says "can be done". Appraiser says "can be done". Banker says "theoretically do-able". Occupied by 70 year old. Vacant value $400k. Being sold for $150k. Property LOSES $4000 a year (before mortgage). NOW, disregarding all other posts (some of which reference a one million dollar cash-out)...... WHY is this deal not Doable.... or is it??. If it is, Then we agree :-). If it isn't........... why not?. Why cant I buy this condo for $400,000, and have a seller's credit for $250,000 (minus whatever it would cost him in taxes.....). ISNT THE APPRAISED VALUE, AS ANY "NORMAL" APPRAISER (WHO DOESN'T READ CREDITNET) WOULD COME UP WITH AS A VALUE?. THE APPRAISER I ASKED SAID THAT HE *NEVER* ASKS THE RENT OF THIS PARTICULAR UNIT, ONLY NEIGHBORHOOD RENTAL VALUES!. (sorry about the caps....).. |
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This is from the very first post:.
Here's the tip: The REASON why I can buy this so cheaply is because there is a young lady (mid 30's) who lives there, and INHERITED the rent control that was in effect in 1913 from her grandpa. (she lived with him, so she inherited the lease.). I don't (and I really mean DON'T) mean any harm by saying this, but what is the deal? Who lives there?.. |
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As I said, please base the merits on the last post alone..
Ok?. When I get a response, I'll explain... |
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OK..
Here goes.. This new condo I am talking about, which I would like to do as a "tryout" before I try the bigger one, is as follows:. The owner is tired of losing money every month, and is looking to sell the condo for $150,000.. The value vacant is $350-400k.. So, I want to buy and cash out.... I can afford the montly outlay... |
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................................ bump.
I need to hear from you guys/gals a final answer!!!.. |
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Do you know if the lease is recorded? I would suggest you look at a prelim. title report before you get too excited...
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Just asked a lawyer who owns a title company....
He said USUALLY they are NOT recorded.. Now what do you think??.. |
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I live in NYC and while I am nowhere as knowledgeable as humblemarc (who you should really be speaking to) I know a few certain facts..
Due the rent control issue which is very controversial now, the true value of the condo depends completely on the lease. My guess that the lease stays even when the condo changes ownership, which is not true with the leases currently being signed. I personally know a few ppl that had their lease legally broken because the owner sold so the lease no longer holds any weight. Most of the time, the new owner renews the lease.. The whole "appraisal" number is nothing but bullshit. I dont care if you get it appraised for 3 mil, if you cant find any buyers. You dont know the true conditions of the building, you dont know the lease conditions either. For all you know, she can transfer that lease to a family member (very common) or a spouse. Your only true guess at vacant value is a nearby condo.. What the real opportunity here is how can you void the lease or force the tenant to move out. Thats it... |
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Hehe,.
Nestea,. Funny how the people you tell to "shut up" are the ones who can help you the most?.. |
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Hey humblemarc, think you can help me out with getting a studio in NYC for a good price? Im sure you still have landlord friends in NYC.
BTW, whats the Lending Tree credit score required by NYC standards?.. |
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I don't know about the studio in Manhattan, I always recommended a Brooklyn brownstone or a New Jersey apt. The Path was always easy to take..
For most people a score of 660-680 or better, or they better have a whole bunch of good references i.e. good paying job, past rental history, etc... |
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OMG, got a spare year..?.
1) I moved out west, and keeping an eye on the properties long distance was too big of a hassle.. 2) I found out there are other ways to make the same type of low-risk, high yield investment, without the hassle.. 3)actually, do you have a few spare years..?.. |
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Wow I thought you were gonna say "morals".
NYC landlords are all classified into degrees of scumbags.. Not trying to call you that of course... |
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I never tried to screw my tenants. I wasn't a slum lord either. I've never done business that way and avoid doing business with people who do business that way...
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Yeah I figured you weren't the scumbag landlord, it's just most of them are..
What do you think about the rent control issue? I hear they want it abolished and honestly I agree because it's not fair that some old people that barely work pay ridiculously low rent while the younger ppl, like myself, have to struggle to pay huge amounts to cover their end... |
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It shouldn't be abolished just revised. I'm sure you know why they started it. Because when NYC was the place to live (it still is) all the scum bag landlords, would raise rents double and triple when the lease was up. Why? because they could. Many richer people were willing to pay those prices for a 40x20 apt. but most people couldn't afford a 200% raise in their rent.
Plus, a lot of people WERE moving away due to the absurd rents. There were a lot of other reasons as well, and this all happened a long time ago, but it still makes some sense now.. To be honest, even when I was a "starving" college student or a "struggling" businessman, I never minded paying the exorbitant rates in order to live in the ever pounding heart of the known universe. But then again, I still can't stay in one home too long. I guess I picked that up from switching from apt. to apt. looking for cheaper and better located deals... |
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I think it's crappy deal if you want to make money..
Where are you going to make your profit? I see how you are planning on getting yourself into debt and a terrible negative cash flow situation (IF you find a lender stupid enough to do the deal). IF you can get the money what will you do then? You won't be able to sell it to a sophisticated investor and make anything. Deed in lieu of foreclosure? I don't think so. This is a situation where I believe theory will look much better than reality.. There are far better ways to make much more money. IMO, you will have to be deceptive to get to third base with this deal. Of course, it's your conscience and integrity. Just remember what ultimately happens when you build a house of cards.. Good luck... |
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Yeah I understand. Right now the situation isnt as bad being that the demand is not that much higher than supply. Rents are more negotiable and there are still great finds if you know Chinese. I'm just planning to save up for a broker and just go that route. Seems like any place that is actually worth the money is listed exclusively with brokers...
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LOL.
That's funny. I actually do know Chinese.. Yea, the broker's get all the prime apts. It's well worth it tho' when your bathroom and kitchen aren't in the same room ;-).. |
