JimBobJoeBobJim says: Robert, that is effing brilliant. When asking about my idea to "share" equity with stuck FBs. Now there's someone who knows how to stroke ego so I'm devoting an entire post to the answer.
How would I do it? The snarky answer is whatever way screws the mark the most. It's gonna be difficult because the first thought of the FB is that their house is worth far more than I will. So, first, I'll "pay" for an appraisal. You and I know that between the then market and my choice of appraisers and the fact that the FB has been neglecting even simple mantainence and hasn't even cleaned up for a showing that the number is gonna come in heart attack low. OMFG! thinks the FB, he thinks he is totally screwed. Still, the kids are in school, there's no money in the bank and his (and her) job(s) takes all his time. Moving and renting is worse than sticking it out if he can. That's when Robert the Mortgage Falcon (version 2*) swoops down. "Man, all you need is some help until the market turns. You paid $400k and you ain't no dummy. Someone, someday will pay $400k or more again. That's why I'm here. You see, I think you made a great investment, you smart investor type you and I want in on your money machine that's just stalled for the moment."
"Gee, that sounds great Mortgage Falcon v2. How does it work?"
"Simply, safely and the neighbors don't even need to know."
They're hooked and I've got my hooks in the same kind of appreciation that we saw 1996-2006 without having to actually go out and buy something.
The original Mortgage Falcon v1 is at: http://exurbannation.blogspot.com/2006/04/real-mfer.html
2 comments:
Howls of laughter- just did this.
Bought FB's home and rented it back to them with rent covering piti on a first and second. They had totally destroyed their credit. My mortgage broker was shocked that you can buy in investment property with no money down and only $3779 to close on a $145k house. Appraised at 185K. Now I just have to get rid of the pesky expensive second and enjoy the $400 a month positive cashflow while laughing about this mess. The funny part is I wrote them an option to buy back their house at the buy price that is good for four years, but I bet they don't make it.
I am truly a vulture. The sad part is that the money they got at close went to a paycheck advance place. They were truly f*cked buyers.
Allenm
-I think you made a great investment, you smart investor type you
Don't forget "handsome". FB's like to be called handsome, too...
-jbjbj
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