OfflineHello DG team,
I wanted to reach out for some advice on an offer I'm putting together and the best way to tackle it.
I found a property on CL with a gent wanting to sell his condo for $80,000. After doing the numbers the FMV is around $65,000. It has a tenant in place and is currently cash flowing at $300 per month. I was thinking standard assignment, offer $55,000 to get it under contract however the gent selling the property is fighting cancer and needs money for treatment. I offered owner financing which he didn't want to do and then a lease option however with time constraints I don't see this as a strong option. Standard financing is an option for me. Unfortunately I don't have the cash. He owns the property outright.
I really want to make this work for both of us. I've come to the point of thinking maybe it's better to walk away from this deal. I anyone has any experience or can give some advice I'm all ears.
Thank you for you time.
Im new as well as im Canadian .
I say keep looking for money at a good rate that you can take the place at 55,000
Do all the math first on typed out paper and approach all money lenders face to face and let them turn you down as well as scan it to your pc and send it to every phone call you make .
Never give up ,you will learn money lenders wont to loan money despertly .Kenneth
Hi Chris - great to hear you have a potential deal! You mentioned standard finance is an option for you. Why not look at a FHA loan - they're only 3% downpayment. $1,650 down plus closing costs. Ask for the seller to pay for your closing costs or do a seller concession (believe FHA allows up to $3k). That would get the money due out of pocket from you to a very small amount. If it's truly a good deal, that may be an option. You would have to live in the home to qualify for FHA, however.
Good luck and let us know!
- Tom
Chris: In order for a transaction to work for an investor, the seller must be both motivated and flexible. Part of flexibility is capability. Your seller has some constraints regarding cash, but how much cash does he need? Probably not the full $55k. If you can get him to more specifically define his cash need, then you are more capable of seeing what possibilities might work for obtaining it. Let's say he needs $10k. Here are some ways of obtaining that amount that may be possibilities:
1) Buyer obtains personal unsecured loan from bank, friend or family member, or other private lender.
2) Seller obtains personal unsecured loan for expenses and buyer pays loan over time.
3) Seller obtains small refinance loan and does seller financing for remaining balance.
4) Seller deeds property to buyer, and buyer obtains small mortgage on property, with remainder of purchase seller financed in a wrap-around/All-inclusive Trust Deed style arrangement.
5) The conventional mortgage purchase you mentioned above on a conventional purchase.
6) I like to do a "finding the money" conversation with people where I propose other ways they can come up with cash in their lives. Most people are simply not that creative in their thinking, so this often works to help them come up with their own method of coming up with the money they need. There must, of course, be a high level of motivation on the part of a seller for them to be willing to do anything different than a standard conventional sale. If there is urgency for this seller, they may be open to creative ways of selling their property, and accepting the payments over time rather than an immediate lump sum. Best wishes on this one.
Dallin Wall
Real Estate Training Team
Forum Blog Location--A collection of my
"Best of" posts:
http://www.deangraziosi.com/blogs/dwall
What will it rent for and what are the HOA dues?
It currently rents for $850 with $500 in expenses including HOA fees. ($300 for HOA and $200 in taxes)
Thank you Dallin. You have given great perspective here with multiple options. I'll go back to him to get a better picture of how much cash he needs now to move forward.