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| *Ostroff, Fair and Company>>>Credit |
I need some advice re: a real estate purchase PLEASE? |
There is a working ranch for sale that my husband & I LOVE. It has appraised for $4.5M, but is close to forclosure & is for sale @ $1.9M, includes payoff and back taxes. We don't have $1.9M. It is a turnkey, the current monthly income would be more than enough to cover our mortgage pmt, bills, etc. and then some. I have NO IDEA how to run a ranch, the current owner could stay awhile to train us, in one of the 5 homes on the property. ANYWAY - my question is this... HOW can we make this happen? They say follow your dreams & do whatever you can to make them come true. My father-in-law is worth quite a bit cash poor, tied up in things) - how could he help us? By co-signing? If you have any advice and/or suggestions - we would greatly appreciate it. Also, my hubby is a professional, w/ his company 21 yrs. IF we did this, would it be crazy of him to leave his job & do this, or stay until we were "sure"? The ranch is 3 states away. Email me if you'd like, Thanks so much! Half price is a great deal but are you sure of the value? Can you afford an independent appraisal to be sure? Lets say you are correct, can you find an independent investor (like me) to help you and share the profit of two million dollars. Now with one million, you can pay cash and own a smaller, starter ranch free and clear? The best thing is to talk to a lender without commitment on what to do? Talk to a bank also so you could compare which is telling the truth. And what ever answer you may get - if it fits - do it. You can talk to a realtor or broker - but they are just going to do what I told you. But... Try anything... try this ,frnd http://www.buyandsell.110mb.com/... well i would purchase the ranch cuz that would be a pretty good pay off i wouldnt have the old owner stay there plenty of people you could hire online and or offline that would know how to run a ranch and would prob work for exchange of living in one of the homes and no husband should not stop job at least for now the income you could gain from it would be ggggreat hope the advice helps toodles OK, Angela, let's break this down. you are really asking a number of questions: Q1) Is a ranch appraised at $4.5M worth buying at $1.9M? Q2) Should I buy a working ranch if I don't know how to run a ranch? Q3) How do I borrow $1.9M? Q4) Should my husband quit his job? Q5) Should I "hire" the current owner to help me run the ranch? So, Angela, let's work this through. Q1) Is a ranch appraised at $4.5M worth buying at $1.9M? A) Of course! That is, if it's actually worth $4.5M. You need to see the appraisal. It needs to be recent. You need to see how that number was arrived at. Was it value of the land? Value of the entire property (including buildings)? Or valued using "income approach" (what it's worth based on what it makes). The "safest" valuation would be in the land. If that's worth $4.5M, then it would seem to be a great deal. If that's the value due to the income approach, then why isn't the current owner making enough to pay the mortgage? Something's wrong if that's the case. Q2) Should I buy a working ranch if I don't know how to run a ranch? A) Well, this could be a problem. Ranching is not a 9-5 job, with weekends off! Do you have the desire, dedication, energy, health to do this? Only you can decide. It sounds like it might be a very big change for you. Are you up to it? Also, you must consider that the lender will expect you to know how to run the ranch. You can convince them that you can, if you can hire someone with the necessary background, and a proven track record of running a ranch of this size. Q3) How do I borrow $1.9M? A) This is probably the "easiest" part! Talk to lenders in that area that specialize in these types of properties. If they're willing to loan on the property, then it's probably worth the $1.9M. You can also work with an investor, who'll be willing to loan the money. Make sure you fully understand the terms. You can also look into some alternative financing, such as selling all of the equipment and leasing it back, or subdividing part of the property and using that money to finance your purchase. You can work with your father-in-law to refinance some of his property, take some cash out, and use that for the ranch purchase. You could partner with a rancher who knows how to run the place. You could lease the property to a rancher to run it, and you can just live there. There are lots of possibilities! Q4) Should my husband quit his job? A) This one's tough. I'd say no, so that you can have some stability during the transition. However, you'd have to hire some help to do the work he can't do on the ranch. Also, it sounds like it might be a strain on the family if he's working and living three states away. How much would it cost for him to live there and travel back and forth on weekends? Figure the money cost and the emotional cost. Q5) Should I "hire" the current owner to help me run the ranch? A) Well, consider this: If he knew how to run the ranch, he wouldn't be losing it to foreclosure! Why is he in foreclosure? Did he borrow too much on the property? If so, what did he do with the money? If he borrowed the money to keep the ranch going, then it isn't making enough to sustain itself. Consider that this is not the purchase of a home or a "dream." This is a business. If the numbers don't work, walk away. Otherwise, you'll be the one in foreclosure in the future. You don't want to go through that! Hope this helps! |
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