Say you have 50k cash in your pocket and no home

[zenoonez]

First Thanks for chiming in Hydrosun. I appreciate it.

Tired of being a grown up.

Lets say you wanted to buy a house that was not at auction etc... You see it on realtor.com. Go and check it out and want to make an offer. Without having your parents cosign etc... is there anyway that you can buy this house. If you've got the 10% in the bank but not enough income on the books where they would approve you for a loan. Is your only option to make a deal with the owner?

If I understand correctly. You're saying it doesn't matter if the owner has a mortgage and does not own the property outright. They can still sell it to you. I'm thinking about people with car notes. How when they still owe on the car, they have to get their financing people to approve you to take over the loan. I guess in this case. The loan would not be assumed, but another loan would be issued? From the owner to you, with the first loan still existing.

In my experience working with someone who bought houses on a regular basis, buying a house like that would be difficult. If you can't get the bank to approve you have to work with the owner in one way or another. The easiest way to do this would be to pursue properties on the verge of bankruptcy or a rent to own situation. If you can catch the property owners before the bank begins bankruptcy proceedings, you can keep the mortgage in the owners name and simply make the payments yourself. In other words you would take over their mortgage and in doing so get a house for much less than it would normally cost and not have to deal with the bank while at the same time repairing their credit. However, these situations are hard to find in the sense that you are actively looking for a place. This is more a strategy investors use by letting potential sellers come to them via advertising like "We Buy Houses" signs and penny saver ads and such. You could cruise the classifieds sections and try to save the houses being put into foreclosure but it is a much harder thing to do once the process has been started. I think Aero actually wrote up a short guide on how to do this and his guide is pretty spot on in my experience.

 

[Hydrosun]

First Thanks for chiming in Hydrosun. I appreciate it.

Tired of being a grown up.

Lets say you wanted to buy a house that was not at auction etc... You see it on realtor.com. Go and check it out and want to make an offer. Without having your parents cosign etc... is there anyway that you can buy this house. If you've got the 10% in the bank but not enough income on the books where they would approve you for a loan. Is your only option to make a deal with the owner?

If I understand correctly. You're saying it doesn't matter if the owner has a mortgage and does not own the property outright. They can still sell it to you. I'm thinking about people with car notes. How when they still owe on the car, they have to get their financing people to approve you to take over the loan. I guess in this case. The loan would not be assumed, but another loan would be issued? From the owner to you, with the first loan still existing.

Correct, it doesn't matter if the guy owns the house or car. With a car it is a pain in the butt because you want to REGISTER it in your name.

With a lease to own option you can sign a contract with the owner and RECORD that option in the books of the county. It records your right to buy the property at a price certain, but the guy selling you the option still has his mortgage with the bank.

So I'm not saying you'd assume the loan I'm only saying that you'd have a legal contractual right to buy the house at a price certain and you'd have occupancy rights with the lease part. I'd also have NO RIGHT TO ENTRY language in the contract.

If you are growing weed you don't want the other guy coming to the property for an inspection or to do a refinance.

So if a guy has a $1k mtg payment and you are going to lease option from him for $1K per month plus price certain, he is happy because your $1K rent pays his mortgage.

 

[Mr.Howie]

I got my house as a foreclosure for 115k with 20% down and no credit check from a local bank. Almost one year later my house is worth between 250k and 300k depending on how long you want it to sit on the market. My house is 3000 sq feet and more than I will ever need. People in my town think that we have a lot of money. However I gutted this house to studs by myself so the remodel was only about 30k. Everything is brand new. The shell of the house, some insulation, some wiring, and some plumbing were left. Other than that everything else is top of the line. With one car payment and a very small mortgage we can live off of the 2400 watts of flower that I have if we needed to. We do not, but if the shit hit the fan we could. As far as what "living" is, depends on who you are. Do you need expensive cars? Had them. When they break they cost way more than a regular car. Do you need to have nice watches and jewelry? I already have that, and I don't wear them very often. Do you need expensive clothing? What's the point? That is as big of a waste as an expensive car that is brand new. Coming from someone that could call the bank and say I have found a new Land Rover I want to go pick up in aother state and they say ok, and everything is done by the time i make the 3 hour drive to get the car "stuff" is not important. I use to be very well off. I owned the company. I called the shots. I also did not see my kids or my wife very often. Although they had plenty of money to spend while i was gone. Now I live in a small hippie town where "stuff" is not so important. Family, Good Organic Food, Good Organic Smoke, home schooling, and enjoying life is important. So now I am happier than ever, and I do not need near as much money to live as i did when I was "well off". Irony. I could turn your 50k into 500,000 really damn fast. However I would have to go back to not living life the way i would like to. To me it is just not worth it. I would rather get my mortgage paid off, and need even less money to live. Being able to enjoy everyday is the most important thing to me now. I will say that you can blow through 50k really quickly so whatever you do make sure and do as much research as possible. Also it is your life, and whatever is important to you is what needs to be done. "stuff" really does not matter. As I wear my Tag Heuer watch and type this. My wife wanted me to buy the Rolex, and i told her that I felt to bad spending that kind of money on a watch. Now isn't that some role reversal.

This is very sound advice from someone who is obviously smart and wise. Most people that have "been there" and have made the big dollars will tell you money doesn't matter...and it doesn't.
Being wealthy to aquire more wealth isn't my goal. My goal is to get to a place where I don't really have bills, and can live a simple life doing the things I enjoy, rather than the things I need to do to be "rich".

That being said I would really like to invest this money wisely, and build on it for my future. Lots of really good ideas in here.

Was talking to a realtor today who suggested owner finance properties. Especially land that could be bought for cheap without the need for credit reports and banks being involved. That gave me hope being that I have built custom homes for the past ten years and could easily buy a pc of land...grow outdoor next season....have enough money to build at least the house shell, and grow indoors!!

This thread has some great ideas (other than obvious clown responses) and great wisdom. Keep it coming!

 

[wantaknow]

a used airstream travel trailer and a older 4x4 surburban to pull it with ,and some out door grow supplys and head to the hills all reminig money i would buy gold and keep it in the ground in gram ingots ,shit will hit the fan soon

 

[headiez247]

Where the fuck do you find a home for $50k?

Here's exactly what I would do:

Spend $5k on a van you can temporarily live out of, food, clothing, a laptop etc. Get a gym membership so you can shower and all.

Live somewhere where food is cheap, like NYC.

OR spend the $5k to rent out a tiny place (1 spare room perhaps) and food.

Take the rest of the money and use it to buy an existing business or to start a business online (very little start up costs) and slowly work my way up, eventually renting/buying a home and so forth.

Document the entire experience and then sell that off as a book if it's interesting.

NYC is not cheap, dumbest place to move if your trying to save money.

Buying a existing business is dumb unless u have a MBA and know exactly what your doing. This is how people lose their life savings.

Definitely not your only option to rent.

Lots of decent fixer uppers in the midwest to be had for 15K. If you can manage to get that amount or so into the bank you can put in an offer for cheap fixer uppers or HUD homes. Typically the bank takes any decent offer they get as its costing them money to keep it (mowing, etc). I'm not necessarily talking "hood" either. Decent 2/3 bdrm homes in decent areas.

*by fixer upper I mean a home with decent "bones" but typically needing plumbing, kitchen/bathroom remodel. Start your "remodel" in the basement - and work your way up. Sleep on a eff'n cot if you have to.

Throw another 20K cash into that fixer upper and you've got a brand new house for 35K.

Put 5K into quality gear (ballasts, fans, important essentials only).
Bury the remaining 10K for emergency purposes.

< - - I wouldnt spend it any other way if your truly wanting to be a home owner.

This is probably the worst suggestion on here. First of all, even if you did pull this off, and on budget, and you 'buried' the remaining 10k, how do you plan on paying for food, overhead, utilities, etc until you have your crop going?

Second, unless you have contractor experience, buying a fixer upper is very dangerous. People who do this who have no experience doing so in the past lose all their money and get fucked in the ass.

People need to stop making dumb suggestions without thinking things through.

Because you asked twice I'll speak up.

As OneLove has already said money / cash talks. Imagin this situation an investor has just purchased a foreclosed home for cash (it is happening all the time in MED states). Let's say the investor paid $100K at auction, maybe you are at the same auction because you know which home you'd like to live in.

You offer that investor $10K down and a purchase (option price) of say $120K (meaning you have to pay off $110K) then you come to an agreement on rent / option period and payment. Say rent of $1K a month and a 7 year option period to come up with the $110K.

Why would an investor take this? Well he just got $10K back on his $100K. He is getting $12K in rent a year (less taxes and expenses) on his $90K. He gets nice tax breaks owning a rental home.

When you do buy the house for $110K he makes $20K on $90K investment and he collected $1K a month in rent for the period.

There are a lot of homes owned by individual investors and they'd be willing to make a deal.

Also let's say instead of keeping all his cash tied up in this house investor took out a mtg. He could get a $90K mtg backed by the house and your $12K in rent payments. He could get all his cash back the day of closing and be cash flow positive.

People who have mtgs on their homes can still sign a binding lease option with you.

By FAR the smartest idea, this is exactly what I would do

 

[Indian Culture]

There are alot of houses out there for 50k that I see these days.

 

[BornToBeWild]

Go to house auctions, a friend bought one for 20k put new siding, roof, drywall for about 10k doing his own work with help of friends. So 30k house that would sell for 100k but we have a shitty market around here. Lot better than renting or on land contract with some bungholios that watch over you.

 

[Cheeb]

- headies247

This is probably the worst suggestion on here. First of all, even if you did pull this off, and on budget, and you 'buried' the remaining 10k, how do you plan on paying for food, overhead, utilities, etc until you have your crop going?

Ha, whatever you say man. I'd rather flat out own my 35K or whatever house then be on the hook to some "investor" for 120K. My suggestion was in fact just that - a suggestion, and was by no means a definitive path for success. Of course you'll need money feed yourself, utilities, etc..no shit... that of course is a lot easier when you have no monthly note. What happens when your "investor" blows your rent money on other shit instead of his mortgage?

What I suggested is easily pulled off if one's not a moron about their money. So..dont bury the 10K. Use it to live off of if need be. You act as though the 10K buried is gone...nope..its still yours and can easily be dug up if needed.

Not saying a land contract is totally bad (but it can be), but I'd still 100% rather own my house outright. Land contract option you speak of is NOT YOURS! .at least not until you pay it in full and the deed is in your hand - until then your at the mercy of your "investor".

I'd rather invest in myself.

People need to stop making dumb suggestions without thinking things through.

Anyone with 50K and no home that is taking any suggestions here "in stone" without fully knowing what they are getting into should just piss it away on coke and hookers. Your taking these posts way too seriously man.

Second, unless you have contractor experience, buying a fixer upper is very dangerous. People who do this who have no experience doing so in the past lose all their money and get fucked in the ass.

No - thats only if its not your money. If you own the 15K home you dont lose your money. Its still your home...there is no mortgage to pay. Your not going to lose your house or get fucked in the ass. It'll still be there until you can afford or have the time to do whatever the fuck you want to do with it. How do you think people "get experience doing so"? They do it the 1st time, learn from there and move forward. Ya gotta start somewhere/

I still fail to see how anyone can lose purchasing a home in this depressed market for 15-20K. Its YOUR HOME - paid in full - ..and the market can only go up from here.

PS - the OP never said anything about wanting to "go big" or anything. He just said 50K and no home.

How's this suggestion... Buy 15K House - Put 20K into it = OWN HOME. Fuck landlords and investors and just live peacefully knowing whats yours is yours.

 

[BagseedSamurai]

I would fucking stop worrying.

 

[mean mr.mustard]

Jesus....

Okay.

Nobody gets what I used to call a sense of humor.

Don't go to the casino.

Put it all in CD's and invest wisely.

Grow old fast and live slowly.

OrganicOzarks... I was speaking of the only people who don't like to see grass growing... I would have thought that was obvious but I've learned something today...

 

[BrnCow]

First, I would find a small lawyer and get some quick education on wrap around contracts and ask him if he will do one for you. Next, find a distressed property about to go into foreclosure or possibly fins and old person wanting to sell and move to another state or something -place an add. Make a deal and take the owner to the lawyer and have the lawyer draw up a wrap around contract making it your responsibility to make payments and take care of taxes, insurance, etc. Make damn sure you have the owner provide you with a signed and notarized power of attorney from the owner also so if something comes up that you can deal with it instead of having to get the owner involved. It is an added benefit when the house is paid off - you can sign the papers into your own name and handle all the paperwork yourself. Pay the owner in front of the lawyer any amount you agreed to give them cash for their equity ...thank the lawyer...and after you are alone again, jump up and down because you just bought a house without putting it into your name. Put the paperwork in a safe place off location - like a safety deposit box and move in! If to gets busted, tell them you were just renting and they maybe can't confiscated it.
Expect to pay $500 or so for the lawyers part. I bought one in Houston once this way. Old lady wanted to move to Calif. I paid here $2200 cash and got the keys. Later sold it and made $40k on it. That wrap around skirted all the bullshit. Might want to get a title search done before you wrap it just in case. My lawyer even made her sign a form that there were no people in line to inherit it either. Dude was cool....be careful..money is like water...flows through small holes. Cut expenses. Might just get an old one and fix up a bedroom, kitchen, and bathroom. Use the rest for profit. Later, tear it down and hire pros to come fix it..sell it and move...do it again...

 

[SOTF420]

Just make sure you goto a medical state if you are gonna grow outside and get a medical license as soon as possible. You can still get in trouble but not nearly as much as many other places.

 

[mean mr.mustard]

But please make sure you actually qualify for medical in said state.

Damn.

 

[Cheeb]

In any case,

people need to be very careful when doing land contracts, contracts for deed, or any other form of obtaining ownership without a conventional mortgage.

Maybe there are safe ways to go about it (please explain if so), but I've known a few people to get totally burnt in this type of situation. I'd advise strongly against snagging a home on a land contract from a owner that cannot make the payment themselves. Unless you are paying directly to the mortgage company whats to prevent them from just not paying the mortgage and letting the house go into foreclosure? Your so called house you've been paying on gets taken out from under you. The owner probably couldn't make his payment himself what makes you think he's going to do the responsible thing and make the payment when your handing him the money?

Or worse yet - what if you pay off the fool's house and he doesn't sign over the deed? All you can do is sue him.

Lawyer up - and make sure its done safely if you go this route.

- - otherwise buy a cheap home and enjoy being mortgage free... or save up while getting legit income in the bank!

Most importantly enjoy life and whatever your doing in it. Its short.
Dont bank on this "green" money - it may not be there forever.

Own your shit and sustain a happy healthy life. Its all we really got in the end.

 

[SOTF420]

Everyone qualifies for medical out west at least!

 

[stony2]

depends if it's the US $, or some currency that actually buys something

 

[kaneboy]

south pacific somewhere $50k sure go a long way ,nice little bit of land on a point with waves peeling or indonesia im pleased easy

 

[Guest3498]

20k - Down payment on a place with lots of space to work with.
15k - a few more lights and a big AC
15k - In the bank until the first harvest

 

[simos]

Put it all in CD's and invest wisely.

CDs eh? The rates are up from their dismal lows a year ago, but 2% over 12 months? I think he can do better than that.

As for investing wisely, I'm with you 110%. Now may not be the time for CDs though...

50k is workable, but not much in this day and age - hardly enough for a pot to piss in out here, real estate wise. I think it would buy you the most in Michigan and Montana, IMHO.

Someone mentioned New Mexico real estate at 1k per acre, but with water? I doubt it. Plus he doesn't need 20 acres, he just needs one or two to do a solid outdoor run. Check out the harvests people are pulling down in their back yards in the outdoor forum if you disagree.

Good luck OP - plan thoughtfully, then act boldly, and bust ass to get a legit income source as well

 

[ThePizzaMan]

Duh, 50k buys allot of lights, nutrients, power and rent. Wouldn't take long before a man had a home and a wonderful business. I guess we all think different although I thought I was with like minded cats here. 50 just isn't enough to waste if your thinking long term, its barley enough for a good emergency legal fund and some gear. Put away 1/2 and invest the other 1/2 in gear, rent, etc. Get that done and everything those above including 2 girls at the same time will fall into your lap. Then again Ive noticed if a man cant do it with a lil nothin he probably cant do it with allot of everything. Anybody can have anything if there willing to do what it takes to get it. Karma, One Love