Kfancii
04-08-2009, 10:44 AM
So last night I met with an Investment Company that buys houses, rehabs them if they need it, and then puts them on the market to sell "Owner Financed" so the properties are available to buyers who might not be able to get bank financing right away. The young man I met with was very nice, seemed to be pretty bright and knew his business. He and his wife have been in this business for 6 years and seem to be quite successful at it.
He looked at my house, and then we ran the numbers - He tries to get you the same money you would if you sold it through a realtor. Let's just say it wasn't pretty - I knew that I was not going to make money on the house, but hoped that I would come close to breaking even. Well, the bottom line was that after negotiating the price of the house, closing costs, holding fees and realtor commissions, I was going to have to come up with $5700 to pay at closing for them to buy my house. I had made up my mind that I would take up to a $5000.00 loss on the house just to get out, so honestly the extra $700 wasn't a deal breaker for me. What ended up being the deal breaker was the "sales" process. When the investment company "buys" your house, they are only transferring the house into their name and taking over your payments. The "sell" the house to a new buyer, but basically collect rent for up to 2 years to allow the buyer to build up credit to qualify for a mortgage loan. They do not pay off my mortgage in full until the new buyer gets that loan. So, that means I still have a big mortgage in my name, but someone else is managing the house, and there are people living it in as theirs, making changes, etc. but I would ultimately be responsible should either the buyer or investment company default on the note. I knew it was too good to be true!
I'm so frustrated right now with the whole housing market and trying to sell this house. I have gone the route of hiring a realtor who didn't do much to get the house sold, sure she showed it a few times and had it on MLS, but there were never any flyers in the box when I went to the house. I then thought about renting the house and had the realtor looking for a qualified renter when she got an application from an 18 year old "gang banger" (his realtors words) wanting to live in the house with his 18 year old girlfiend, his 17 year old sister, and a 7 month old baby. My DH said no way and we took the house off the rental market. With the fair housing act in place, you can't discriminate and turn folks down for anything other than a poor credit score or bad rental history. This kid had a 750 credit score which is great, but no rental history as he lived with Dad, and he and his sister worked for Dad. It just wasn't a good situation.
I even tried to get one of my friends to "housesit" for me for the next year so the house wouldn't be vacant and made her the offer to live in the house rent free (I would pay the mortgage payments) if she would pay the utilities. That means she could have lived in the house for a year for about $350 a month and she turned me down because my house is located about 20 miles outside of Austin. When I was renting, I would have jumped at an offer like that from a friend!
I just don't know what to do next- My house is about an hours drive from DH's house and as long as I don't have a renter or housesitter, that means we have to drive there every week to do the yard or pay more money out of my pocket (I'm spending about $1200 a month for mortgage and utilities as it is now for a house I'm not living in) to hire someone to keep up the yard. Thankfully, I can currently afford the payments, but it means that I can't contribute much to our current household, so some of our projects keep getting put off.
I know owning a home is the American Dream, but right now I feel like owning my house is becoming a nightmare! Thanks for letting me vent.
He looked at my house, and then we ran the numbers - He tries to get you the same money you would if you sold it through a realtor. Let's just say it wasn't pretty - I knew that I was not going to make money on the house, but hoped that I would come close to breaking even. Well, the bottom line was that after negotiating the price of the house, closing costs, holding fees and realtor commissions, I was going to have to come up with $5700 to pay at closing for them to buy my house. I had made up my mind that I would take up to a $5000.00 loss on the house just to get out, so honestly the extra $700 wasn't a deal breaker for me. What ended up being the deal breaker was the "sales" process. When the investment company "buys" your house, they are only transferring the house into their name and taking over your payments. The "sell" the house to a new buyer, but basically collect rent for up to 2 years to allow the buyer to build up credit to qualify for a mortgage loan. They do not pay off my mortgage in full until the new buyer gets that loan. So, that means I still have a big mortgage in my name, but someone else is managing the house, and there are people living it in as theirs, making changes, etc. but I would ultimately be responsible should either the buyer or investment company default on the note. I knew it was too good to be true!
I'm so frustrated right now with the whole housing market and trying to sell this house. I have gone the route of hiring a realtor who didn't do much to get the house sold, sure she showed it a few times and had it on MLS, but there were never any flyers in the box when I went to the house. I then thought about renting the house and had the realtor looking for a qualified renter when she got an application from an 18 year old "gang banger" (his realtors words) wanting to live in the house with his 18 year old girlfiend, his 17 year old sister, and a 7 month old baby. My DH said no way and we took the house off the rental market. With the fair housing act in place, you can't discriminate and turn folks down for anything other than a poor credit score or bad rental history. This kid had a 750 credit score which is great, but no rental history as he lived with Dad, and he and his sister worked for Dad. It just wasn't a good situation.
I even tried to get one of my friends to "housesit" for me for the next year so the house wouldn't be vacant and made her the offer to live in the house rent free (I would pay the mortgage payments) if she would pay the utilities. That means she could have lived in the house for a year for about $350 a month and she turned me down because my house is located about 20 miles outside of Austin. When I was renting, I would have jumped at an offer like that from a friend!
I just don't know what to do next- My house is about an hours drive from DH's house and as long as I don't have a renter or housesitter, that means we have to drive there every week to do the yard or pay more money out of my pocket (I'm spending about $1200 a month for mortgage and utilities as it is now for a house I'm not living in) to hire someone to keep up the yard. Thankfully, I can currently afford the payments, but it means that I can't contribute much to our current household, so some of our projects keep getting put off.
I know owning a home is the American Dream, but right now I feel like owning my house is becoming a nightmare! Thanks for letting me vent.