Owner Finance Counter Offer - Need a little help

What are the requirements of your buyers? How much equity do they require?

73k (purchase) + 20k (repairs) = 93k which is higher than your retail value.

73k (purchase) + 8k (rent ready repairs) = 81k

81k/92k = 88% leaving at most 12% equity for your investor.

Most investors would probably pass on this since there's not really a deal here because of no equity.

A 93k loan at 7% interest for 30 years = monthly payment of $619. Then you'd still have property tax (I approximate about $200 / month for my area although you can look this up usually) and then you'd have insurance. I'll approximate that at $50.

619 + 200 = 819 + 50 = $869.
$900 (rent) - $869 (payments) = $31 per month for 30 years to pay for any management fees as well as all of the repairs.

An 81k loan (assuming all other numbers are the same) would drop the payment by $80 per month giving you potentially $111 per month for everything.

The post above really nails it on the head.

There isn't any equity in this deal and investors would pass on it. $73k + $20k in repairs = $93k, which is more than it's worth. In addition, it will always cost more than you expect!

If the owner is firm at $73k, move onto the next one.

- Tom

In this case I would findvthe sellers magic buttons.......yes the numbers don't make it a good deal but the numbers r not setvin stone.....u MUST FIND THE SELLERS MAGIC BUTTONS. Find out what he owes on this....findvoutbif he will take o down and payments and STILL give him his asking price.let's just say he owes nothing on the property and he has two mortgages to pay or he lost his job or he is moving or a death inbthe family or he's getting divorced or he just got the house given to him or I could go on and on...........until u find out his M.B........... u DON'T KNOW......IF YOU DON'T ASK ....YOU DON'T RECEIVE.....I don't know how many deals I have CREATED.....JUST BY finding out this info.....
Ok you talk him into giving him $1,000 down and 300 a Mnth and give him 3% interest ....with a balloon Pymnt in 5 yrs...............giving him his asking price of 73k
RIGHT NOW GET ON CRAIGSLIST AND MARKET OR GHOST AD A HOUSE WITH THESE EXACT SPECIFICS FOR $5,000 DOWN 600 PER MNTH........8% INTEREST.....TOTAL SALE PRICE...$95,000....
AD READS

DO YOU WANT TO OWN YOUR OWN HOME TODAY???????
if so contact me at ....xxx...xxxx...xxx NOW! !!!.--------------THIS AWESOME DEAL WILL NOT LAST THE WEEKEND!!!!!!! I have many rent to own houses but this WILL GO QUICK!!!

HURRY THIS LOW DOWN DEAL IS ALREADY ALL OVER FACEBOOK AND BEING OFFERED AS WE SPEAK!!!!!

I GARAUNTEE YOU will get calls.....when u do ....u just take their 5000...and give the seller 1000. Pocket 4000 and u will get 600 per Mnth. Pocket 300 per mnthand also make on the end....with interest.

Sometimes just because the numbers don't work u have to think a little different.....there r MANY out there that have 5000 down and can afford 600 or more and would LOVE, LOVE, LOVE TO GET THIS DEAL......especially a handy man...........BELIEVE ME ....THIS IS VERY DOABLE!!!!!!!!
GOOD LUCK
JAY

Or buy on land contract then sell on land contract......
note: check your local or state laws first to see if these strategies r legal.....as SOME STATES DIFFER WITH OTHERS.
jay

this sounds like a win/win for you and the seller...but finding the M S in Motivated Seller equals finding the motivation and the situation! This will help you to make it a deal or not!
Barbara

If this is an owner financing property, ask how much they need to have every month. Divide whatever they want by the purchase price they want to pay. So, say they want at least $500/month, offer them $0 down, and $500/month for 146 months. If they mention interest (NEVER mention interest first!) say that because you are giving them full price, the interest is included in the price, but don't bring it up unless he does; he will be ecstatic at a full price offer . You'll pay it off in approximately 12 years and pay nothing in interest.

If you don't think that is a good deal; look at it this way; if you had to finance this property at 8% interest, in 12 years you'd pay an additional $40,000 in interest. Lets say you could do a traditional loan at 5% for 30 years... you still end up paying $67,000 in interest costs!

Its all about perspective and how you look at the deal...

Its important to calculate your other costs, insurance (mine cost about $30/mo in CA), taxes (1.1% in my area, would be $792/year or $66/mo ), HOA, management fees if you're not managing it yourself.

$500+$66+$30 = $596/ mo.

$900//mo rent = $304/mo CASHFLOW... with an initial input of $5-8K...and no interest ever...
You could even ask for $8K at closing to fix it up, and offer to pay the loan for another 16 months... be creative! Maybe he doesn't have extra cash; but maybe he does... you don't know until you assess the situation!
You also get the tax benefit. If you're getting a $300/month cashflow, you're doing good! If you don't want this deal, PM me!!!!

So many ways to set this up!

GREAT MINDS THINK ALIKE! We must've posted at the same time (well when I started your message wasn't there yet, I had to leave the computer for the kids a few time), look at the title of both our messages! HIGH FIVE!!!

for the words of wisdom. Chris, Jay, and Tammy thank you for laying out some very detailed options. Like Jay said I've got to get to the heart of what the owner wants and what they will accept.

I agree there is a deal there. I just have to make it work. Tammy, I may PM you once I hear back from the owner.

I'll keep all of you posted.
Fish

remember to reasearch the property records at courthouse

Mike has great advice......check to see if the person u r talking to is even the OWNER!!!! the county records will show if there r any recordings of leins or judgements and who the legal owners r..........its funny mike mentions this as one time this really happened to me.......the person trying to sell me a house DIDN'T actually own it.....they were the MIDDLE MAN........and when I talked to the REAL owner.....he didn't even want to sell! !!!! Research like mike says.....

high five tammy!!!!!!!

Keep us informed fish on this deal! !

Also if u need help with negotiating on the phone to get his magic buttons....let me know I will 3 way with u and seller to say we r partners.......just so u can make something happen on this.......
Jay

Thanks for the info/reminder! The person I'm working with is the owner. They bought the house in the mid 80s. Per your advice I'm trying to find out why she wants or needs 73k. No word back from her.

Jay, I'll defnitiely let you know if I need some help. I love this strategy. I can't tell you how many other leads I passed on because I was trying to fit the numbers into a wholesale deal only.

Fish