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.