[DjB]

So you know, that Red and are are splitsville already. She is moving this weekend hopefully and soon after that I will be as soon as I get things taken care of here. I was looking at apartments and townhomes around town and saw a couple I really liked.

Fast forward to today, a good friend of mine at work presented me with a pretty cool offer. He has a house that he's been trying to unload for a couple years and offered it to me contract for deed. He is asking 28,000 for it and spread out over 5 years my monthly payments would only be around 466.00 per month. It's a 3 bedroom fixer upper (not in too bad of shape actually) with a big yard in a quiet neighborhood. Only problem is it's an hour away. Which I guess wouldn't be that bad since he lives across the street and we could at least carpool to save on gas. It should be a no brainer but I have to go over the good and bad.

Rent in town for a few dollars more a month and never own it or move an hour away and own my home free and clear in 5 years. What says the PHBT?

Any advice? I've never given any thought into the whole contract for deed thing before.

This post has been edited by DjB: 09 February 2010 - 01:15 AM

[chauvan]

Might be good. What kind of gas mileage on your car? If you drive a monster truck and you get 5 gpm, you might want to reconsider.

[DjB]

chauvan, on 08 February 2010 - 07:13 PM, said:

Might be good. What kind of gas mileage on your car? If you drive a monster truck and you get 5 gpm, you might want to reconsider.

I get about 25-27 MPG in the Caliber.

[chauvan]

DjB, on 08 February 2010 - 08:14 PM, said:

I get about 25-27 MPG in the Caliber.

The commute sounds good, and its an excuse to buy a motorcycle for even better gas mileage.


(I don't know shit about the house part though)

[Spoon]

Yeah not bad I drive 45-50 mins a day in my old S10 =s out to a tank a week.

[Connie]

Find out how much of a fixer upper it is. Don't rely on your buddy for this info either.

[ScottS]

How long is your commute now? Driving for 2 hours a day sucks.

But it still might be worth it.

[Marmot]

Do you thing you can go back to high density housing after owing your own home? If I had to, peoples would die.

Marmot

[DieselGopher]

Marmot, on 08 February 2010 - 08:09 PM, said:

Do you thing you can go back to high density housing after owing your own home? If I had to, peoples would die.

Marmot

So much of this!

[DjB]

I'm going to go see it when I hear from my buddy on whats going on. He has renters in it now but heard they are looking elsewhere. It's a big maybe right now.

My commute now is about 15 minutes round trip. I like that. there is nothing between there and work but cornfields and interstate.

[moon]

keep the kids schooling in mind.... on issues like this, its easier for EVEYONE if you live in a reasonable proximity to each other..... trust me.... I know this..... MANG!

[DjB]

moon, on 08 February 2010 - 08:34 PM, said:

keep the kids schooling in mind.... on issues like this, its easier for EVEYONE if you live in a reasonable proximity to each other..... trust me.... I know this..... MANG!

Yeah, I was thinking about this too and thats a big selling point right there. Being that far away from her mom is ok but not that far away from my kid.

[pods8]

DjB, on 09 February 2010 - 01:01 AM, said:

He is asking 28,000 for it

How much of a fixer is it?

*Looks at monthly payment*

[43hertz]

There's certainly nothing wrong witha contract for deed. Bought my first house that way back in the late eighties.

[DjB]

pods8, on 08 February 2010 - 09:20 PM, said:

How much of a fixer is it?

*Looks at monthly payment*

He just wants what he owes for it because he and his wife bought another house a few years ago and wants out from under this one. He did tell me it could use new windows, insulation. I imagine it could use a few updates as far as flooring, cabinets and stuff like that but thats all stuff that can be done over time.

[cavman]

DjB, on 08 February 2010 - 11:10 PM, said:

He just wants what he owes for it because he and his wife bought another house a few years ago and wants out from under this one. He did tell me it could use new windows, insulation. I imagine it could use a few updates as far as flooring, cabinets and stuff like that but thats all stuff that can be done over time.

pay for an inspector and understand what you could be getting into before you buy.

[Deerslyr]

Red flags abound when I hear the terms "friend", "fixer upper" and "contract deed" uttered in the same paragraph.

Seriously. How good of a friendship is this? Do you want it to last? Because if you don't, go ahead.

Here's the advice. Know exactly what the house is going to need. Get a home inspection to determine if what he is asking for plus the cost of repairs equals Fair Market Value. Get an attorney involved to handle the transaction (trust me on this one... money well spent). Does he have a loan on the house? Will his existing lender let him do this? You will have zero protection if he defaults on his loan and the lender will not, under any circumstance allow you to "just take over" the financing. Do you get a portion of your $$ back if it falls through in 5 years?

SERIOUSLY... for as much as the PH likes to give advice, we don't know what we are talking about in this specific contract situation. In order to protect yourself financially, you HAVE to retain a lawyer to guide you through this. I can't stress it enough. The stuff I pointed out is stuff at the top of my head without having handled a residential transaction in over 11 years.

[Deerslyr]

DjB, on 08 February 2010 - 08:10 PM, said:

He just wants what he owes for it because he and his wife bought another house a few years ago and wants out from under this one. He did tell me it could use new windows, insulation. I imagine it could use a few updates as far as flooring, cabinets and stuff like that but thats all stuff that can be done over time.

He needs to find out if his lender will even let him do this. See my other message.

[toonces]

cavman, on 08 February 2010 - 09:13 PM, said:

pay for an inspector and understand what you could be getting into before you buy.

this.

also, consider this. yes, in 5 years you will own the place. but, is it something that in 6 years you can actually sell? will someone actually want to buy this house?

a friend has a house that he's been trying to sell for about 3 years here. it's in a good neighbor hood, it was built in 1975(which is young by los alamos standards). but, the house is laid out funky. it's a duplex and it doesn't have a garage. plus, i think he's asking too much for it.

the point is, he has a house he can't sell unless he's willing to take a loss on it. owning your own home in 5 years is attractive. but only if you can sell the thing later on, if you should need to.

[UGALawDawg]

Deerslyr, on 08 February 2010 - 11:16 PM, said:

Red flags abound when I hear the terms "friend", "fixer upper" and "contract deed" uttered in the same paragraph.

Seriously. How good of a friendship is this? Do you want it to last? Because if you don't, go ahead.

Here's the advice. Know exactly what the house is going to need. Get a home inspection to determine if what he is asking for plus the cost of repairs equals Fair Market Value. Get an attorney involved to handle the transaction (trust me on this one... money well spent). Does he have a loan on the house? Will his existing lender let him do this? You will have zero protection if he defaults on his loan and the lender will not, under any circumstance allow you to "just take over" the financing. Do you get a portion of your $$ back if it falls through in 5 years?

SERIOUSLY... for as much as the PH likes to give advice, we don't know what we are talking about in this specific contract situation. In order to protect yourself financially, you HAVE to retain a lawyer to guide you through this. I can't stress it enough. The stuff I pointed out is stuff at the top of my head without having handled a residential transaction in over 11 years.

This... all of this.

Why not just get traditional financing and buy it from him in a normal transaction?