OfflineI've got a duplex that I've had under contract for some time. The owner wanted cash $27,000. It's ARV is $64,000 and it needs approx $10,000 or less in repairs. Only a few people have looked at it. It's in a smaller neighboring town and most of my investors and cash buyers are in neighboring large towns. This duplex could bring in $800-$900/month. He still wants me to get it sold for him although we have had no luck in 2 months!!
So I asked him about doing owner financing. He wants 1/2 down or $13,500 and want the rest financed for 1 year. There is no way I can get someone to buy this and pay $1000/month for 1 year.. they will be losing money even if the repairs are $5000 and the rent is $900/month provided they get someone in it right away. I asked him about rent to own, but he still wants the balance in one year. I need some suggestions as to how to structure this so that he gets a good down payment and his money in one year without having the buyer go in the red during that year!! I really don't think it's possible!! I want to help this guy, but I just don't see how I can when he wants it all paid in full in 1 year!
Everything works out in the end. If it hasn't worked out, it's not the end.
You have not lived a perfect day, unless you have done something for someone who will never be able to repay you. Ruth Smeltzer
It is what it is 'til you change it.
= cash flow of 638-738 month
Mike
https://tvallc.isrefer.com/go/RehabLite/renvestr/ Free tools
13,500 down, no payments, 13,500 due in one year?
The Balloon payment in the end. Just gotta make sure you can make the payment and move it by that time.
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Find a REAL buyer. If your list does not include someone that can finance $27,000 and pay the owner cash you need to keep building. Then again this may be a deal that a real investor does not want for one reason or the other.
As far as the owner finance deal:
If it is a desirable property, they will have negative cash flow for a year. They will make it all back the next 33 months (down payment included) and never have a debt payment again. Sell it that way. The monthly payment will be easier for some one to handle in my opinion. Make the negative cash flow for 1 YEAR a positive!
Michael Mangham
Mentoring/Team Building Nationwide
MD Home Acquisitions LLC
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really sound advice. we need to look at things from a variety of different angles so we can determine what works best. i also like turning negatives into positives.
Linda, Army EOD Mom
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He doesn't want to do anything like this. He wants 1/2 now and balance in a year.
Everything works out in the end. If it hasn't worked out, it's not the end.
You have not lived a perfect day, unless you have done something for someone who will never be able to repay you. Ruth Smeltzer
It is what it is 'til you change it.
I did consider that for him. Thanks.
Everything works out in the end. If it hasn't worked out, it's not the end.
You have not lived a perfect day, unless you have done something for someone who will never be able to repay you. Ruth Smeltzer
It is what it is 'til you change it.
I like that idea but didn't know exactly how to market it with negative cash flow.. That's a good idea to make it a positive in that respect. I do have cash buyers that can buy it outright, but like I said it's in a town that's "tucked away" from everything else. A nice town, but a small town. THank you Michael!!
As far as the owner finance deal:
If it is a desirable property, they will have negative cash flow for a year. They will make it all back the next 33 months (down payment included) and never have a debt payment again. Sell it that way. The monthly payment will be easier for some one to handle in my opinion. Make the negative cash flow for 1 YEAR a positive!
Michael Mangham
Mentoring/Team Building Nationwide
MD Home Acquisitions LLC
Everything works out in the end. If it hasn't worked out, it's not the end.
You have not lived a perfect day, unless you have done something for someone who will never be able to repay you. Ruth Smeltzer
It is what it is 'til you change it.
Hey Shirley, could you find tenants that would pay the $800-$900 per month, get an estimate from a couple of contractors that would do the rehab, find a property manager, then present the whole package to an investor buyer...
Valerie
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"I believe in angels, the kind that heaven sends; I am surrounded by angels, but I call them friends" - Unknown
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SSSOOOO many options to use for your buyer to show HOW they can benefit by buying this property
Cash flow NOW or
as MMangham said above, carry the load for 2+ yrs and then FULL cash flow FOREVER
Be the "Problem Solver" by showing creating the WIN/WIN situation
as TRSD stated, 1/2 down and balloon payment @ end of 12 months-
collect the rents @ 850 x 12= 10,200 and add the balance...DONE
Give them what they want OR show them HOW they could benefit otherwise
YOU can do it!
Mike
Mike
https://tvallc.isrefer.com/go/RehabLite/renvestr/ Free tools