March 25, 2020

Our Founder speaks to Malik Mingo about selling a house with no equity

Our founder Steve Keighery (Aussie Steve) caught up with Malik Mingo from Great Day Louisiana to talk about how Home Buyer Louisiana helps people sell problem houses and solve problem situations for home owners. Malik and Steve dove into solutions for selling a house with no equity. Watch the video or see the audio transcript below.

Malik: While most of us think owning a home is an asset, for some it could become a liability, and that’s where Louisiana could step in and help relieve that burden. Our next guest is back to talk about how his company can help. Please help me. Welcome home buyer Louisiana business owner Aussie Steve.

Steve: G,day Malik, I’m glad to be back. Thanks for having me on the show again again.

Malik: Glad you are back on. My grandmother is watching this right now. She’s like, oh my God, the Australian guy is back. We are glad you are back on the show this morning to talk about how to really sell our home. What sort of houses do you buy over at Home Buyer Louisiana?

Steve: The house we buy generally fall into two buckets. They are either a problem house or maybe the owner has a problem situation.

So a problem house can range from something that maybe he’s been vacant since Katrina, could be gutted, have termite damage and be a long way away from being ready for a homeowner. Or maybe on the other end of that spectrum, perhaps the house just hasn’t been really updated in the past decade. It might need a new kitchen, bathroom flooring to be ready for a homeowner. We purchase those houses in as is condition and we will fix them up and flip them to a new homeowner.

Or maybe the owner of the property is in a problem situation. So that could be someone that needs to sell really fast. Maybe there’s a medical emergency and they don’t have time to list with a realtor and wait for a homebuyer’s financing to get approved. They might just need the house sold like yesterday. Maybe they inherited a house and they don’t really want to clear out the belongings or deal with all of that. They want to sell in As Is condition. Maybe they are facing foreclosure. These are the problem situations we are really used to dealing with.

Malik: I’m glad that you do help out different people in different situations. I want to go through a couple of situations to see if you maybe can help that type of person. Say someone is trying to sell a house where there’s no equity in the property. Can you help them? If so, how do you help them?

Steve: Yeah, we definitely can. It’s a common problem. When someone has house where there’s no equity they sort of get stock and have a lot of trouble selling it. This is a situation we can definitely help with. An example might be someone that, let’s say the house is worth $150,000. If they sell to a homeowner who uses finances, they can get that $150,000. But let’s say they owe $140,000 on the property still now. Well, on the face of it, it might seem like to have equity, but if you dig a little deeper, they actually don’t.

Generally if you’re selling through a realtor to a homeowner, you need to allow about 10% of the sales price to cover the commissions to both the selling realtor and to the buying realtor, to cover closing costs and probably concessions that come out of inspections.

So in that scenario, this person, while they sold it for $150,000, they’re actually only going to net $135,000, but they owe $140,000 on the property. So they’re going to get a phone call from the Title Attorney who’s going to ask them to bring a check for $5,000 to sell their house to someone. I don’t know about Malik but most people don’t really want to pay money to someone to buy their own house, right?

Malik: No they don’t. They just want to get out, which is the goal for a lot of people.

Now I’m curious, what about somebody who they haven’t made their mortgage payment. Can you help them out as well? If so, how do you do that?

Steve: Yeah, absolutely. They might be facing foreclosure. So we absolutely can purchase a property if it works for cash. If it’s also if they’re also behind and they’ve got no equity in the house like our last example, we can also help them.

So in that case, what we generally are doing is we’ll purchase the property, but we won’t payoff the loan at closing, instead we’ll start taking over the mortgage payments. So say for that example used before, let’s say that person, they owe $140,000. We can purchase it for that $150,000 that they would have got from the homeowner. But when you sell directly to us, you don’t pay the closing fees or realtor commission. So at the closing they’ll get $10,000, the difference between $140,000 loan and the $150,000 sales price. But instead of paying off that $140,000 what we’ll do is we’ll take over the payment so that lien will still stay against the property. But we’re making the payment on that loan. So we take ownership. We’re responsible for everything, we need to pay taxes, If we put a tenant in place and they injure themselves, they’re going to sue us as legal owners. So we buy the property but we’re paying that mortgage instead of paying it off at the closing.

Malik: This is so interesting to me. This really does baffle me on how you’re really going to buy the property as is sometimes seems like to me you’re taking on the burden. Why aren’t more people not doing this type of buying like you are?

Steve: Well, I mean, firstly, you need to be the right sort of person to take on that burden. We are a professional real estate company. So we’re very used to dealing with these problems. So, you know, we have a lot of properties and we have a network of title attorneys, property managers and professionals. So we’re pretty comfortable taking on that responsibility because we know how to turn around. I think a lot of people don’t necessarily know how to do that.
I also think due to some of these creative solutions, like taking over payments, when people are selling through a realtor they don’t get those suggestions. Realtors are highly trained to sell properties that are ready for a homeowner. They don’t always have the training about how to sell a problem property like that. So I think there’s just a gap. Look, for most people, if you’re selling a house, if it’s ready for a homeowner, then selling through a realtor is your best bet. But it’s that small percentage of people that have that problem property, a problem situation. The realtors don’t necessarily have the training to deal with that. And that’s why someone like us who deals with this all day, day in, day out, we really excel in that situation.

Malik: It is an unbelievable business. And I think it is fascinating to see. Thank you for joining us once again, my friend. And hey, to learn more about Home Buyer, Louisiana has a great website full of frequently asked questions. Just log on to or give them a call.

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