OfflineWe found the FSBO that we are interested right around the corner..very exciting!
Upon calling the owner, we found out that he just put the property up for sale. They live in Long Island and purchased the prop. 4 years ago for their boys to attend college here in Upstate NY. The boys have just graduated and it is time to clean up the place and sell. FSBO sign on the lawn.
We are contractors and know what needs to be done. He would love to sell as is and not have to deal with the improvements that need to be made. He states he would hold a mortgage as the house is free and clear, with 20% down and 7% interest.
Here's our idea...tell me if this sounds like a win win for both...
He holds the property for us for 24 months. We pay for all the repairs out of pocket and ask for 3 months to complete the makeover. We then start making payments agreed upon plus a credit so he feels like he making a bit extra. We have a clause that states we can rent the property and we can reassign if we so choose. If by the 24 months we can't do it, we lose our money and he has a better property than he started with and puts the sign back out.
Sounds great right.. now my questions are...since this would be our first deal...
How do we convince the seller to pay the taxes?
What if something major happens to the place while we are renting it...who is liable?
Should we put a cap on repairs that we will pay..and is that fair to the seller?
I feel really positive about this deal...I know it is totally feasible..just a bit nervous on the presentation part...but the seller won't know that.
Any advice? Anyone done this one before?
Thanks for the time!!
Tracy
Hoping someone will come through with an answer to these initial questions..Thank you anyone for your time!! I really need it!
Tracy
Hello Tracy,
First, I don't protest to be the expert but I do know about these kind of deals I a few questions for you though;
Who decided on the terms 20% and 7% or has that been decided? I think the down is high
I would suggest you try to get closer to a 5 year contract. Find a tenant buyer and have a 24 month contract with them, If they fail, you will have enough time to do it again with a 2nd tenant buyer.
collect a NON REFUNDABLE consideration fee enough so that it covers your repairs and then some,at the end you will put the down money toward the purchase price.
What is the purchase price and how did you come to that?
How much in repairs does it need?
Have you decided how you will find a tenant buyer?
I do not think you should pay extra each month, but your tenant buyer will need to pay you extra every month. But before you answer that what are you going to do with this house in the end? that will determine what steps to take.
There is more to this. Sounds like you have the makings of a good deal. please feel free to PM me.
Donna
"Don't tell me I can't, Tell me how I can."