Have a Great deal but can't find funding

Ask him to sell you one of the properties for $117K with a contigency to throw in the other properties free and clear.

This isn't a bad idea but how do I get the banks to lend me more than the value of the property. I obviously have to go the creative route but I'm at a loss at what I can offer. I figure this:

I can offer 117,900 (the list price on all his advertised properties)
ask for 3% credit because of the condition of the properties
pay 20% down

ask to carry the rest for 5 years at 7%....

the cash flow is about 3K and the mortgage would be about 400 or 500....

this is the only route I can think of right now...

any advice would be appreciated especially if you know some lenders or LO's who will loan 100K on these terms or whatever terms....

If you said he's an investor you may want to ask for seller financing with you putting a down payment - the seller credit you want. If you want to go the loan route I can help Im a loan officer. See if you can structure all 3 properties in one contract like cbr said this will help whatever lender you go too when they send their appraisals. If you go FHA you only need 3.5% down

If you do go the seller financing route, keep in mind that usually an investor will want a higher interest rate on their money, (much like hard money lenders) do to the risk and unwanted management of the property (meaning keeping track of payments and etc). You probably looking at 10% for 5-10 yrs.

However here is a thought that could work. I am investor and I specialize in discounted paper. Like everyone else has posted, you could ask the seller to seller finance all the properties with a down payment on your end so that you have a financial interest in the property. This benefits the seller in multiple ways:

A) he will have some quick cash in his pocket NOW.
B) he will have sold his home
C) he will have the potential to make more money on the property in the duration of the note due to interest.
D) if you miss a payment, he can incur late fees + if for some reason you can't make payments anymore, he can foreclose on you and keep the property.

So meaning, by seller financing the property to you, his interests are secured.

How it benefits you is simple:

A) you get your three properties at a reasonable price
B) you get the amazing cash flow potential and at the end of the terms you get to keep the home to sell in the future for a big profit
C) you just made the deal and can now move on to other deals

Now how I can help:

when you approach the seller and ask if he would be willing to carry back the note, you can mention not only the above benefits to him (seeing thats what most people care about, "whats in it for me?") or you can tell him about the added option of selling his note to another investor such as myself. My company, Cash Flow Solutions, specializes in cashing out investments for investors by giving them a lump sum of cash at a discount. This benefits the seller because:

A) they won't have to wait the 5-10-15 yrs to get paid out their money
B) they will get a lump sum of cash now to use for other investments
C) they won't need to stress over collecting payments and making sure their buyers are on time
D) they can use their money for any personal situation that is happening in their lives now, such as health issues, paying tuition, paying of debt and taxes, going on a dream vacation, or investing in another property.

I basically wholesale mortgage notes. So this is an added benefit that you can take to the table when negotiating terms with your seller. Not to mention, it could be a valuable resource for you as well, especially when you are on the same end as your seller down the road. You can get cash quick, and use that cash to invest in other properties.

Anyways, sorry for the long post, but the benefits to the seller and yourself are huge when you use the strategy of seller financing, why do you think banks lend their money out? Because of the security and options available to them. So think about that! If they are just interested in cashing out, refer them to me if the deal goes through and tell them I can get them a free quote.

If you have any other questions, send me a pm, or contact me at kbarnes17@cffsolutions.com, and we can discuss them further. Take care.

Good investing!

Kris

TREMENDOUS power in Kris's post.

Kris,
Thanks a lot...this is an excellent post. I will offer this as soon as possible and I'll be in contact shortly..

Thanks again

Duncan