I would like your feedback on this offer.

Seller owes 44K on a house with ARV of 100K. Inherited from parents. Asking 115K and pays 600 PITI. Rents run 1000/mo. in neighborhood.

  1. All cash… ARV (100K) minus 30%=70K
    70K minus repairs (11100) = 58900
    less B/S/H 4370 (15% plus fudge factor)= 54530
    less profit (5k) = 49530 as MAO.

  2. Zero down. As an incentive, give everything over 100K (when house is sold) to seller to approve deal.
    Do this as a lease/option for 6 years (72 mo.) Lease at 1000/month. Payments start 60 days after close.
    Give seller $800/month x 72= 14400 (200 cash flow per month)
    After 72 months buyer buys house for 125K.

Seller gets- 44K (what’s owed on house)+ 14400+25K (everything over 100k) = 83400.
I get 5k (option consideration)+14400 (my share of cash flow)+100k=119400.

  1. Pay the sellers asking price… 115k asking price with zero down, zero interest. Payments start 60 days after close.
    Pay seller 700/month for 165 months.
    44K balance disappears after 72 months and seller clears 700/month for 93 months.

Seller- 44K+7200 (72 months at 100 cash flow)+65100 (700 per month for 93 months)= 116300
I get rent (at 1000/month)=49500 (300/month for 165 months)+ house (125K) which equals 174500.

Let me know if I missed something in these equations. I appreciate all feedback and enjoy this forum very much!
Thanks in advance. Rob

You forgot your purchase price. You are paying $44K and selling for $125K. You are giving the seller $25K (everything over $100K) plus $44K (your purchase price). This only leaves $56K of the sale proceeds in your pocket, not the full $100K. You still get the cash flow and the option consideration.

You need to make a similar adjustment in your third scenario for your $115K purchase price…