I bought a house in a rundown urban area about 2 years ago as a remodel, investment project. I’ve finshed the remodel and I’m currently living there and would like to move, however I’m having a lot of trouble selling the house.
I’m trying FSBO right now, since realtor fees would really eat into any gains I might expect to make to make on the property. But it’s tough to sell. Most prospective buyers can’t really secure the financing they’d need to purchase (rundown urban area)
I did get a call from an investor who owns some rental houses nearby who wants to buy on land contract. He wants to make payments to me for a 2 years (I talked him into agreeing to 1 year) spend some initial money on further improving the property and hopes to rent it out. At the end of that 1-2 year period he would close on the house and pay me the balance. He would also be paying taxes and insurance for this period of course. He’s not willing to put a downpayment down.
Now on the surface, if this works out, It’s a great deal. He’s buying at my asking price, plus paying me interest for a year or two, so it’s a good deal. But obviously there’s a LOT of risk involved for me. He seems like a good guy, his business is legitmate, and he’s a licensed realtor. But in a normal market I’d never do this. However, since I’m in a “rundown urban” market, and since I’m having trouble finding buyers, and since this would offer me my full asking price… I’m sort of considering it.
Is this a semi-common investment strategy for buying cheaper houses in urban areas? (I kind of have a feeling it may be) Or am I completely nuts for even entertaining the idea?