Home › Forums › General › EHTrust/EHT Topics and Creative Real Estate Financing › sending NEO’s/purchase offers on million dollar properties
August 16, 2008 at 1:29 am #5069
i just sent an email to a FSBO homeowner who’s willing to try a lease option on his $2.99M property in CA. i told him flat out that his property was way out of my league but i just had to ask if he was interested. i told him i came across 3 high net worth buyers who had cash, cant get a loan and wanted a larger home. i also made a couple of good selling points about the tax deductions while leasing using a triple net lease.
majority of my NEOs are below $500k and i just had the nerve today to email a FSBO in a $2.99M price range.
i was just laughing my ass off after i sent.
im expecting a NO, so who cares. at least i asked. so now im waiting for his response (if any).August 16, 2008 at 4:32 am #26821
Alvin, Alvin. Why doubtest thou? My first successful transaction involved a 4M property. I netted 27K for about six hours of work on a short term EHT. What difference does it make if the value is 500K or 5M? It’s just a number. It’s just math. People build 2.99M homes so someone else can occupy a 2.99M home. Simple math. Do not suppose that there are no more than a few potential RB’s for that property if you get the word out to the right people and if you can convince your future settlor beneficiary that you have the skill and tools necessary to make it happen. If you don’t believe it can happen, chances are your seller will pick up on your vibes and not give you the time of day. YOU ARE THE MAN and everybody in Cal. that needs your help needs to know it! Now go and advise your seller on the best solution he will ever find and MAKE IT HAPPEN!August 16, 2008 at 5:18 pm #26822
no more than a few potential RB’s for that property if you get the word out to the right people
I will bet that most people posting here do not know how to get the word out to the right people. What are the “right People” for a 3 mil home?
How long is your term for these high price homes for 3,4,5… years?
Do you expect them to get financing at the termination point or just sell it?
How do you get jumbo and super jumbo loans with possibly high LTVs?
I am asking because I am preparing an NEO on a near 1 Mil property and have been wondering about the exit strategy on high end homes.
StuAugust 16, 2008 at 7:48 pm #26823
Good post Stu. First things first. Is the property a better fit for a short term trust or a longer term EHT? That should immediately determine your exit and the type of partner(s) you should be looking for. If the Settlor prefers to get out without staying on the loan, he/she should be willing to give a 30% or more discount if the equity is there for a short term equity share. If the margin isn’t there, obviously you are more poised for a long term EHT. For a short termer, you will need a qualified owner occupant buyer or a seasoned investor with a good exit strategy that may be interested in a nice chunk of change at the termination of the trust at closing as a beneficiary. (FYI, I have a steady supply of qualified investors looking for great deals that have great exit strategies in place.) For the long term trust, you will look for an RB that can afford the payment but does not want to qualify at this time. Granted, RB’s for super jumbos are less common. I get that, but they are out there. Why wouldn’t they be?August 16, 2008 at 9:15 pm #26824
@Dave S. wrote:
FYI, I have a steady supply of qualified investors looking for great deals that have great exit strategies in place.
I have a steady supply of really good deals where a cash investor can get a real nice piece of the pie, just lacking the cash investor. Perhaps we can work something out.
@Dave S. wrote:
Is the property a better fit for a short term trust or a longer term EHT?
This is going to be a 2-3 year term or more.
What I need to know is the exit strategy for someone looking at a Jumbo loan in 2-3 years, can they get financing and what parameters do we need for them to get refinance.
I sent Scott an email with this question as I felt he would be the one that knows.
@Dave S. wrote:
Granted, RB’s for super jumbos are less common. I get that, but they are out there.
I know there out there, but, which pond do you best fish in to find one?
StuAugust 16, 2008 at 9:31 pm #26825
I sent you an email.
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