Creative Financing structure-----HELP

I had the opportunity this morning to see a truly motivated seller with a fixer upper that belongs to his newly wife. It has been in the market as a “for sale by owner” for the last fourth months and they would like to sell it no later than Dec 15 before starts snowing.

Similar houses across the street have sold for $330K, they are asking $230K but I already told them that for me to get the deal done, I’d need to get the house for $180K. The house needs about $50K in updating and they are willing to hold a second note.

If I get the house for $180 + $50K in repairs that brings me to $230K with a potential of $70-100K profit.

So far so good.

How do I creatively finance this deal since they are willing to hold 20% note for couple of years… and pull out extra cash for repairs carrying cost? I have very little money in the bank.

I told them that I’d get back to them by Tuesday, any advice is greatly appeciated.

So you need $145k to purchase plus $50k for the rehab. The seller can hold his portion as a second and get hard money load for the $145k and escrow the $50k for the repairs. Hard Money lenders should not have a problem with that since their position is protected, but you need to consult with them. Your challenge will be how to come up with the monthly payments, and the unexpected. Other alternatives are wholesaling and partnership.

other (cheaper) alternatives are finding a lender who will finance the property plus escrow for repairs. the LTV on this deal would be good, so you shouldn’t have a problem finding a deal like this for SIGNIFICANTLY less $$$$ than a HML will cost you.

You probably won’t find this financing at a “bank.” You need a good broker.