Whats the best way to negociate seller financing?

Dear members…

How does one structure his/her deal

Let say I am interested in a $132K property which should be worth around $145K. AS IS
after some touch ups and improvements. it should worth somewhere around $175K (ie finish the basement and add a second bath.)

I am planning to offer them 2 prices, one is Straghtly Cash deal. I have $130K via Line of Credit. and 20K cash for the fixings.

They already have one offer pending.

First -123K all cash offer

or $70K of my own money from my LOC, and $70K seller finance to give me more leverage. (remember there is a pending offer!)

How should the Seller Financing part be structured?

$70K for 5 years? with no interest? which yield $1160 of payment per month. Or should I ask the seller to host a 2nd mortgage for let say 15 years with interest?

I am ready to make them an offer tomorrow. I am planning on renting it out for $1200 per month (without the additional finished basement and 2nd bath) and flip it in 3 years.

Thanks in advance.


Howdy Realstart:

I would just go sit down with the owner if possible and talk about what he needs from the deal. Have you even discussed owner financing or what they owe on the property. You may be able to assume or do sub2 with $10,000. I hate to make off the wall offers with seller financing and not knowing the details of the deal. If they own free and clear then have at it but know what is owed first.

Thanks… I dont think I am going to push it, since it is at around 85% LVR. and they are putting up the $ for the termite Treatment and wood repair. It was a rental unit before, and they have dressed up the front yard to made it really attractive. (Prof. Landscape works!) it was own by a landscaping company, so I might look for a long shot landscaping deal instead of owner financing.

Thanks for your help!