So a cash offer of 290 just it won’t work, like that’s too close to what you’re listed for. Because if I go and pay 290 I mean, I might not end up selling this thing for because 340 obviously isn’t getting it done. Is it going to take 300 I mean, there’s no spread, then I’m Yeah, then I’m really losing. I said, so, like, what’s your what’s a realistic number that you could do? He’s like, Well, he’s like, I still owe 235
I said, Okay. I said, Well, yeah, so instead of taking a huge haircut, have you ever considered selling your home on terms? He’s like, Well, what? What’s What’s that? What’s terms? I said, Well, basically, you sell it to me for a price. Let’s say I’ll pay you full price. I’ll pay you 340,000 I’m going to give you a little bit of a down payment, and then the remaining balance, I’m going to pay you out over time. That way you don’t take a huge haircut right now, by selling it cash, you’re going to make a lot more. And we figure out what works for everybody. Works for you, works for me on that time frame that I pay you out over time, right? Your mortgage is going to stay in place.
His mortgage is 235,000 at 3% I said, that’s going to stay in place. And so the difference between 340 and 235,is $105,000 I said, I’m going to give you $20,000 down. So you’re going to carry a second for $85,000we’ll work out a payment that that works for me, works for you. I’ll pay it. And then I always try and do a 10 year term. So always, right? You don’t want to go too short. I said, I’ll make payments on this for 10, for 10 years, and then at year 10, I have to pay you off the entire balance. He’s like, dude, I’m I’m down with that. Like, that works. It gives me some cash, and I sell it for the higher price. And he’s like, I’m totally down with that, he said, But? And I’m like, oh, boy, what? Oh, what’s the but? He’s like, my insurance went way up, and so my payment on this thing is $2,000 a month. What? What I said is it cash only have a $235,000
mortgage at 3% you should not be $2,000 payment. Yeah, you gotta get more insurance. It’s the homeowner’s insurance. The homeowner’s insurance. He apparently had a lapse in homeowners insurance, which I don’t know how he did, because the lender is the one that makes sure you have it. So he had a lapse in homeowners insurance, and the lender put on what’s called a it’s a force policy, and it’s a very double, it’s more than double what it would be on a normal policy. So I dug around a little bit and found out that you can get rid of those. You can go find normal homeowners insurance and get rid of that. He just hasn’t done it. He’s been too just caught up with life and problems, and so he just hasn’t done it. So you’re solving a problem here.
This sounds like a problem you found, and you’re solving it exactly. So he has $2,000 a month. If you get normal homeowners insurance on it, it’ll be 1700 Okay? And what is, what is Zillow saying that the cat, the potential rent estimate is in that area, just because I’m assuming you would rent it or sell it on a wrap, right? So what I always have, I always have Zillow. I always have Zillow pulled up, and when I click on it still doesn’t only hold this and rent it, okay? You’ll rent it, okay? Or you wholesale it, because you can wholesale sub two deals, of course, yeah, on a wrap, right? And you can go and wholesale it to somebody with more. Basically, you’re selling it for more than what your your down payment is, your total entry fee, and you throw a wholesale fee on there, and it’s still, it can still make good sense for an investor, I think, oh, okay, yeah. So I had comps at $2,500 a month and $3,000 a month, because this house is big. It’s 3100 square feet. It’s got a full basement in it, a house, yeah, even at $2,000 a month, even at $2,000 a month, the deal works. But it even makes it better when you get normal homeowners insurance on it, and you’re able to only have it 1700 bucks a month. So in my $600 a month in rent and all in on his payment, your $2,000 that’s p, i, t i right? Principal, interest, taxes, and so, insurance, yep. Lynn, can I do something super quick? I want to share the screen with people, just so they they know that. This is why it wouldn’t work for a wholesale deal. So, just so everyone understands the numbers behind wholesale.
You know, cash offers, uh. Lane, you said that he’s trying to sell for 340 on the MLS, yeah, and it’s not moving 340 so i that means it’s not going to sell at 340 so let’s actually just say it’s worth like, 320 potentially, right? And at 290if we were to get it for what he was kind of wanting, at 290 after paying, you know, if you’re going to flip it, if you paid insurance interest. Got hard money. It took maybe two or three months. You put maybe you just clean up a little bit, fix a bathroom or so. You don’t put too much money into it. You want to make 5k you put 5k into it, and you want to make a 10k wholesale fee.
You look at the numbers, and if you bought a house at 290 trying to resell it for like 323, 30, you’re losing money. So really, like, when the cash offer for it to make sense, you have to get it at a quite a discount. That’s why you’re looking for people who you know are motivated. The house needs to be, you know, has quite a bit of distress, like you need to fix it up. So anyway, Lane, I just want to show everybody that like, for cash offers gotta be considerably, a lot lower. But in this situation, because it is livable. You can do, definitely do a sub two deal, and the interest rate’s low Exactly. So I want to get Francisco on the phone right now. Let’s call him brother. So I have not presented him a deal yet. I’ve talked to him about the problems of his high payment.
It makes it a little bit more difficult on the sub two but I’m going to call and just kind of walk through this scenario with them and then see where we end up. I mean, I’m going to end up making them an offer right now. If we can agree on it, I’ll get the paperwork over to him today. I love it. You’re going to call him
right now. Francisco, hey, it’s lane again. How you doing good? Hey, did I catch you at a good time? Field? Okay, yeah, just, I’m just hearing a lot of background noise. I can’t hear you very well. I guess I call you back because I am at a graduation. Okay, well, I actually, I can hear I can hear you pretty good. Now, is it okay if we have a conversation real quick? Yeah, we can have a thought. Okay, I can hear you. I can, I can. Hey, Francisco, all right, so you know, I’m, I’m looking at your house and comping it out.
And because you’re listed at 340 I just think that, you know my cash offer is going to be well below what your payoff is, because your payoff is at 235 and, you know, I don’t know what it’s going to take to get your home sold, because obviously 340s not not doing the trick. And so I don’t know if that’s going to end up having to be 320 or even 300 and so I think that I mean anybody that is going to
get on a cash offer. I mean, honestly, I don’t even think it’s worth talking about, because I don’t, I mean, I don’t want to, I don’t want to offend you. And it’s going to be, it’s going to be well below your, your payoff. But yeah, it would be, it would be around like 205,000 Yeah. So obviously, no, no, remember, we talked about selling it on terms, yeah.
So this is what I can do, even though your your payments a little high for what it should be because of the insurance. So if we, if we have to leave that insurance in place, what I can do is I can give you a much higher purchase price. I can come in with a little bit of a down payment, right? And then I’m going to, I’m going to be responsible for making the payments on your loan, so that’ll, that’ll come off your plate. And then the purchase price that I could do is basically, you know, I can do what you have it listed for. And so then that difference between your the difference between your mortgage and the 340 we would just have to put a term term on that. And the term that we would want is about 10 years. Give the numbers up already. No what I can do. What I can do is I can come in with $20,000 down. So at closing, you get 20, $20,000 right? And so that would leave a balance of $105,000 that I would owe you. And we would put a 10 year term on that every month I make the payments to your, you know, for to your bank and to your mortgage company, and then I would also pay you an additional payment each month for the next 10 years. And then at year 10, the balance is due in full, okay?
And then I’m fine with that, just with the title and all that, it’ll be under my name or whatever. So the mortgage stays in your name. There’s two different things. When you sell a house, right? There’s a deed of trust and there’s also a title. So you’re going to sell your home, and I’m going to take title to it, subject to your loan staying in place.
So the deed is going to stay in place, and that deed is going to remain in your name. Something happens on your end for that right 100% and our paperwork is ironclad to protect you and to protect us every time, every time we buy a home subject to it is serviced with a professional servicing company, and we have an accelerated deed that we both sign, so if I ever go late or or something happens, that home can immediately revert back to you and and you get the home back without having to go through the foreclosure process, without, without having to do anything like that. Sure.100% what I want to what I want to do Francisco. What I want to do is I want to verify I have your email correct, which is Francisco. So what I’ll do is, I’ll just, I’ll email you the paperwork. You can take a look at it. We can jump on another phone call if you need to. We can go through any questions that you have, and then we can move forward and get this thing off your plate. Okay, my email, just to make sure everything is written out. Yeah, if you want to text it to me right now, just to double verify that I have it right, that’d be great.
Okay, that works. All right, you’ll have, you’ll have this contract within the next hour. Hey, thank you, Francisco, enjoy that graduation.
Bye, bye, bam. First call, baby. Let’s go. Did we just? Did we just get a deal? I think we just got a deal, baby, everybody live. Let’s go. I think we just got a deal. I think they just got a deal my man, my man is down. My man is down for that. So here is what my plan is with this property. Just so everybody knows, if it is not in my backyard market, which is Phoenix, Arizona.
I’m wholesaling everything, so I’ve already run my numbers, and I know what the market is for investors buying sub two deals. And so me coming in with a $20,000 down payment. That’s less than 10% of ARV. I know I can go sell that for close to 20% of ARV, because if you look at it, an investor that is going to buy it. You know, the cash flows there, they have a 3% interest rate, which you can I may never see that interest rate come back in my life. I don’t know. We’ll see. I mean, that is an asset, and so for them to get that with less than 20% down on a property investors love it. So I think, in my, my opinion, I think that I’m going to be able to wholesale that thing for close to 50, $60,000 entry fee. That means you make 40, because you’re giving him 20, correct. If I get, if I get 60, I might go a little bit lower, just to make it more enticing and a better deal for one of my investors, by the way, everyone, the way this works is if Lane gives the What’s this guy’s name, Francisco. So if you give Francis Cisco 320 purchase price with 20k down.
And you want to wholesale to someone, you would have to increase the purchase price by your wholesale fee, the down that you’re going to add on top of his down. So for example, if you’re giving him 20k down to 320 you want to make 20k you would sell it to an investor for 340 because you’re adding 20k to the purchase price. And you would increase the down by 20k that’s how we get paid when we wholesale. Subject two deals is by increasing the purchase price and increasing the down. All right, for everybody that doesn’t know how to do that, that’s it. From me lane, thank you so much. I appreciate it. Let’s do it again next week, I’ll have I’ll have leads piled up. All right, everybody, we’ll see you next week. And obviously you know where to find us if you want to chat before then. All right, see you guys. Hey everybody. What’s up? It’s Nathan Payne, and for the first time ever, we just released this insane training bundle that has literally everything that I’ve learned from doing a combined 4000 deals in real estate, all from starting with absolutely no previous business background experience or any real estate experience, plus there’s over $19,000 worth of free gifts that we’re throwing in, all for an insanely low, low price. If you want to get your hands on this, be sure to click the first link on the description below, right now.
