Hello All I would like TO know how i should set this deal up… I have had someone call me today trying to move a home for $18,900 and i dont have the cash to buy it but would love it as a rental home for some supplemental cash for now(would love to somehow keep it for my portfolio its a excellent rental home i dont know why they wont just keep it and rent it)… the home’s FMV is $28,000 new roof and furnance so how could i set the deal up to satisfy the seller with no money to put down… Thanks In Advance :beer
REIGUY,
You need to find out what it is the seller needs to know where to go with this.
No one on this board can tell you.
We can all throw possibilities at you but finiding out the sellers immediate need…that is where the offer that will work is it.
18.9K is way too much if it needs a new roof and other work. You should pay no a penny more than 70% of 28K minus rehab or 19.6K - rehab. It sounds like you are around 15K.
Ask them if you came over with a bag of cash right now, what is the lowest they would except. Act surprised then suggest a lower amount with the hope that you can meet in the middle but on a lease option. Ask them if they would be ok with guaranteed rents, 1K to start with, no vacancy or maintenance issues and that middle price. Basically you are solving all their problems and the only thing they need to do is collect a check every month.
You can tell the seller that the only way you can come close to his asking price of $18,900 is if he is willing to work with you on your terms. Make him multiple offers but make the offer that you want him to accept shines.
For example. Whip out a yellow pad and number it from 1 to 4. Then write it in front of him.
1st offer - All cash at $11,200 ($28k x 65% - $5k repairs(as an example) - $2k wholesale fee = $11,200 )
2nd offer - Part cash + Part owner financing for $15k.
3rd offer - $17k, 100% owner financing (you decide the terms that would work for you)
4th offer - $18,900. on a straight option or lease option agreement. Structure it so that any repairs you put into the property could be deducted of the purchase price or look to get a really low rental price.
By doing this, it would really force him to decide what he is truly after. If he picks #1 then he really needs cash now and you can lock it up at that price and wholesale it.
So, would paying for all repairs during the lease/option term and having the amount spent credited toward the purchase be considered adequate option consideration by a seller (not necessarily the OP’s seller but in general)?
If both parties agree, yes.
So, would paying for all repairs during the lease/option term and having the amount spent credited toward the purchase be considered adequate option consideration by a seller (not necessarily the OP’s seller but in general)?
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Good to know. In your experience how easy has it been to get the seller to agree to that?
Its never make or break a deal. If I get it its icing on the cake. If I don’t its okay as well. I am looking to structure something that would work for everyone involved. Usually, if I do not get it I will ask for something else and because the seller turned me down on it, the seller is bound to say “yes” on another thing.