Private investor + Extra $$

General Real Estate Investing
1

Would this work…

Home with FMV of 125k
Seller agrees to a selling price of 115k
Existing mortgage of 60k

I bring in private money 93,750k (75% of 125kFMV)

Pay off existing mortgage of 60k
Have 33,750k left
Give the seller 10k for moving money
Ask the seller to carry a second for 12 months of 45k at %6.5

There is still 23,750k on the table I will keep :bobble

A the 12 month mark the loan will be seasoned, I will refinance the propery,pay off the private money and the second mortgage held by the seller. I will already have a wraparound mortgage on the property in place to a buyer.

Any one see any flaws in this master plan :biggrin

Thanks in advance for all the pearls of wisdom :beer

Stephanie

2

Sounds to me that you will be over-leveraged and owe more than it’s worth.

94k + 45k = $139k

You said the value is $125k.

Doesn’t sound very good to me.

3

Your right, my figures were whacked. :rolleyes

I am being much to generous to the seller, I would need to get that selling price way down.

The theory sounded so good in my head :biggrin

Stephanie

4

Plus the moving money you are giving the seller makes your total investment $125K, which is the full retail value of the property. Unless you can sell this $125K property on a wrap for $150K, your $24K ‘profit’ in this deal is just an illusion.