Investment Exit Strategy

I’m new to the board and investing period. I figure the most important step in investing is just taking action after you have educated yourself. I’m 24 now so I know if I keep at it, I’ll be financially free by 30. Just a little info on me

But my question is I have been in contact w/a seller who has inherited a home from grandparents that appraises for 88k arv. I have negotiated down to 40k from their original 65k. I marketed the home at 55k on Craigslist and a homeowner contacted me asking for an owner finance deal. They said they could put 6k down and would pay up to 700 a month. How could I wholesale this deal or what else could be another exit strategy? Thanks in advance


First congrats… Second why are you selling it so cheap… And third dont use ARV to determine value. Forth congrats again…


congrats on jumping in…

you can ask the sellers if they are intersted in doing owner financing with you and if they agree offer them 4k down 500 a month for 1 to 2 years so that out of the 6k you keep 2k and pay the sellers 4k and when you recieve the monthly 700 you keep 200 and give the sellers 500 and tell the new buyers that with owner financing the purchase price is 65k so that in the end of the option period you keep 25 and pay your sellers there 40k just a example of how you can make a creative exit strategy its called a sandwich lease option(look it up on the form for more details) i would be typing forever lol…

if the sellers are not interested keep shoppin the deal somebody should turn up soon… :cool

Here are some other options to consider. Why not look into this persons credit scores, 580 is the absolute minimum required, and look at their job history. you want to see a 2 year history, most preferable is a 2 year in the same line of work history. and lastly determine what this persons debt ratio is, keeping it 45% of gross income or lower, however there are several lenders that can go to 55%.

Then if this person or any other potential buyer fits this criteria, you could do a contract with them. Record it so they are officially on title and then have them refinance immediately via and FHA loan per the terms that you set in your contract. FHA will allow them to refinance to 97.75% of the lessor of current market value or the orginal purchse price if they have owned the property for less than 1 year. This means they typically will be allowed a max. loan to 97.75% of the orginal purchase price when they bought the property from you.
If they owe you more per the contract with you than the 97.75% will cover, no problem, FHA has no CLTV, or combined loan to value restriction. More in 2nd reply

To finish what I was saying. If they owe you more per your contract with them than what their max. loan will allow on the FHA loan, you can agree to subbordinate the remaining balance.

Now lets think about the mechanics going on here. you can find an undervalued property, sell it on contract and even accept zero money down, record the contract and require the buyer to refinance via FHA immediately, get a nice chunk of your money up front, carry a contract for the remainder, and collect monthly payments, thereby creating a cash flow as well. All this, if done correctly with zero money out of your pocket, and zero risk on your part.

I wont give you all my secrets, but I would be more than happy to do the FHA loan, no matter what state its in.My bank is multi state licensed, so most likely we cover your state as well.

Do you want to know more, get in touch with me, I’ll give ya some free bee’s.

What kind of condition is the house in? Sounds like it needs TLC?

To sorta summarize what’s already been said by a few:

  1. Get a contract to buy it from the seller via owner financing, on favorable terms. Low price, as little down as possible, lowest payment they’ll take.
  2. Get a contract to sell it to the buyers via owner financing, on favorable terms. ARV or more, but if it needs TLC get as close to ARV as you can. You’re making it easy to buy, you can sell for a premium price.
  3. Send the contract to the attorney that understands these types of deals and tell him to set up a closing.

Work out the kinks as they come to you.

Congrats on your new career. You’re well positioned. Sure wish I had even HEARD of creative real estate investing when I was 24!