Need Advice on Financing This Deal

I am a new investor and excited about a deal I have found, but need advice on what are the best ways to get the best bang for my buck.

Property is in an estate sale.

Sales price $115,000
Rehab $25,000
Market Value after rehab $190,000 to $200,000

I am looking for creative ways to approach the sellers (two brothers). I have bad credit and most likely will need HM to finance the deal or some other creative ways I don’t know about. Can anyone offer advice? Thanks

Define Bad Credit.

Credit about 550

Go HML for the purchase and rehab, at that point either sell, or refinance to a traditional lender. If you need I have contacts for HML’s that will go to 65-75 % ARV what state are you in?

Hi, thanks. I am in San Antonio, Texas. It looks like the 70-75% range is where I will need to be. Do you know much about wholesaling back to another investor for short term fast cash? Can you provide any investors who would be interested in buying the property from another investor?

What price range?

It will be around $135,000. The house will sell for around $185,000 to $190,000

I wil check around to see who’s interested…in mean time do you still need financing? I have a HML contacts

Yes, I do. I have another property I just found and the loan will be around $350,000. The market value once the rehab is done will be around $500,000

are you required to put down any earnest money?

Don’t know as I just found the property and I will have to bid on it and see if my offer is accepted.

Did you get the deal yet? If it is as good as you claim it should be gone already. Your ratio is $200k/$115k = 57.5% , even with $190/$115 you are @ %60which is more then enough for any HM lender.You will also be able to get the money for the repairs, continuously on a draw basis. It looks like no money down deal to me. You need to get the contract asap! Otherwise It’ll be gone quick, and you can’t go to the HM lender without a contract since they are most likely still active rehabbers themself. How did you come up with a After Repair Value? You have to be sure it is not wishfull thinking. Your whole evaluation of the deal is based on it.
Do you have enough money for carrying costs while repairs are done ? Intrest rates are 12%-18% with different amount of points. Look for a lender that deffers points and closing costs to the end of the loan. Also they must not ask for downpayment in otherwords finance 100% of the deal. The easiest way to get the deal is to put in a cash offer backed up with your preapproval letter from HM lender and offer to close in 15 days or less, make your contract assignable and offer low deposit. (try $100 if they ask for more give it to them, up to 1%) Agents will ask that at the minimum. If you can get the inspection clause in the contract where you get your money back, but by all means get an inspection done for about $300.
I would be interested in getting this deal from you if you want to make your quick $7500, providing the property ARV is at least $190k.

Thanks for the advice. I do npt have the deal yet. The sellers are fbeing flakey. I offerer their asking price and they said they had a couple more people that were going to look at it over the weekend to see if they could get a higher offer. Now I think they will use my 115,000 offer to get higher bids. Any suggestions? I got the ARV by doing a comp sale search in the area over the last couple months and houses like this one are selling for between $98 - $105 sq ft and have less land. The property I am looking at is .60 of an acre and the others were .40 acres or less and still were getting those sq ft prices. Based from this, I estimated my ARV and by looking at the other homes that sold and their location.

<< Now I think they will use my 115,000 offer to get higher bids. Any suggestions? >>

Yeah, when you write offers, give the seller a nearby deadline (like tomoorow at 5:00 PM). This keeps them from shopping the offer. You offered their asking price…what gives?


Thanks for the advice on the offer deadline.

These two brothers selling the property are in no big hurry to sell. They are willing to wait and see if more drive by lookers may want to see the property and make an offer. It is really frustrating because I see what the potential is and they are just looking for a little extra cash from the estate of their mom. Any suggestions anyone??

You’re not dealing with motivated sellers. I would tell them: “I have found another property…I like yours a whole lot better but I need to move forward. Please make a decision on the full-price offer that I made against YOUR asking price or I am going to withdraw it and move on to the next property”. Then do it. Leave your contact info…I bet that if they don’t accept your offer, that they will call you back.


When you make an offer always try to keep it below what they are asking for because they will think they are asking too little [as in your case]. Even if it is low, try to go lower for the same reason/

Also good point on writing a deadline, so they don’t get to shop around!


Is there a rule of thumb on how much below asking price you should offer?

I would say about
$3,000-$5,000 if it’s close to what you are willing to pay for it.

Also try to stay away from price:

  1. Try to ask them how much they want to walk away with $.
  2. Ask this question after you know how much they owe on it.

This gives you an idea on what to offer, not focusing on Price.\


p.s When asking these 2 questions above, don’t ask them at them these one after another, because it eliminates it’s purpose of staying away from price.

Thanks again for the advice. Just a few notes. I started at 105,000, then 110,000 and had no bites from the sellers. They basically said 115,000 and no less. I offered the 115,000 because I know the room I have to work with. I believe they then told the next potential buyer of my offer of 115,000 to get them to offer 120,000. This is where the price is now. This property will sell for $190,000 to $200,000 ARV. It’s a hot area and not many homes for sale right now. This is one I don’t want to slip through my fingers if possible. Please keep the suggestions coming. The sellers told me they were going to make a decision by the end of August. I want to make them decide before then if possible; of course in my favor. What are some other seller incentives I can offer that will set me apart from other buyers???