How would you structure this?

Question

Seller owes 24k. I agree to buy for 35k. What would be the safest way to finance this property without getting conventional financing? Owner is open to all forms of creative financing.
Thanks!

Jon Holdman · Answer

Good deal. I'd try to get a deed.  Have your proposed doing a second with the seller?  Or a wrap?  Wrap the existing note with that payment going directly to the lender and the remainder going to the seller.  Land contract would be second choice, lease option third.

How much is the payment on the first?  If thats a 30 year mortgage, and its relatively new, the payment must be around $150 (plus taxes and insurance).  If so you could offer the seller say $400 a month for 30 months.  That's $12,000, more than the $11,000 they're asking for.  You'll be just break even for that 2.5 years, but then in a very nice position after that.

Michael R. · Answer

Arv about 45k. Needs about 1k work. Looking to buy and hold. Rented at 1200/month. Was thinking about doing a Land Contract. Any thoughts?

Eddie Ziv · Answer

easiest way? 11K cash and wraparound on the 24K
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Interesting option, but how do you do a wraparound on sale without triggering "due on sale" of the first mortgage?

Norm Chrostowski · Answer

What's the ARV of the house? What are you doing with it? Buy and hold, flip, wholesale?

Steve Sparks · Answer

easiest way? 11K cash and wraparound on the 24K

Eddie Ziv · Answer

You are in a tough place. Even if the owner agrees to finance the difference ($11K), your choices are - private money (Friend, family or other investors) or hard money. Unfortunately, conventional loans are form $40K -$50K and up.
Other option is maybe to talk to the original lender, they may have an idea  how to accomplish that. There maybe greater equity in the house and  therefor more money can be borrowed, but I seriously doubt it since cash out is the hardest thing to get this days.

How would you structure this?

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