I made contact with a seller of a vacant house that a family member of mine rented 15 years ago. The house has been vacant for 7-10 years. I think it needs a new roof although it is not leaking yet, alot of updating, and all new windows. I have spoken to the owner and orignally told him I was going to keep the house if I bought it. Which I would like to rent it out or rent mine out and move into that one or the next time I talk to him I will tell him that I will rent it to my brother. Either way I will do what I say.
He is not really motivated but I bet after a home inspection and contractor estimates he would see that it would take alot of money and time for him to get it rentable. (he does all the work himself)
What strategies can I to negotiate and finance this property.
If I can get this property @60% ARV minus repairs to get him to hold the mortage try to get a HELOC on whatever equity I can or a construction loan.
How does a construction loan work?
Should I ask him how much he would sell it for if he decided to sell it?
Last time I talked to him, he bitched about the carrying cost on the house.
If he is not really motivated, don’t waste much time. You might try waving a check under his nose. At least make a solid offer and leave it on his table for him to consider. Then move on and don’t wait on him. It doesn’t sound like there is much of a chance.
DB
Have you really tried to get to his level of motivation? (not being mean, but confused I guess)
You said ~I will keep it or rent to your brother~ ok
But then ~ Should I ask him how much would he sell it for? ~
You did a great job in finding part of his problem “holding costs & repairs”…now work on a solution. But you need to build a trust with him…talk to him.
Find out what he owes on the property, what the holding costs are, see if he is willing to sell. My guess is maybe. Clearly he isn’t going to do work himself…its been vacant for years, you just need to convince him into selling to you.
Show him how to make money long term with it, have him hold the mortgage for you. That will show INCOME to him, without him having to do anything to the building.
After talking and he proves to be unmotivated…move on. Don’t waste time on him. I would do just a little more work on him…then move on, but check back in 6mo.s later.
oh yeah, on the six month check-in…mail or drop off a signed contract. Nothing speaks louder than action.
Thanks. That is along the lines of what I wanted to hear.
Do you have any advice on where I can obtain financing for construction.