Seller Carryback Financing-Singh Corporation

Rental Property Investor · Columbus OHIO · Member since 2024 · 4 posts · 1 vote

Currently in negotiations with Singh Development Company to purchase my rental home (as in condition-renters moved out) located in Columbus, Ohio with Seller Carryback Financing.

SEEKING feedback from other Sellers of rental or primary residence homes who have dealt with SINGH Development Company agreeing to Seller Carryback Finance terms and "the end result" from beginning to end of contract terms.

The proposed offer is for 7 years, $600 monthly payment to Seller, balance due at end of 7 years, 0% interest as final overall price paid to Seller after 7 years from date of closing is inflated to $270,000. Current market value of "as is condition" rental home is $175,000 to $200,000.

Thank you for your feedback

Doug

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Chris SeveneyBusiness Member

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Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes

@Douglas Schwart

I would run from this deal. Ohio is a lengthy foreclosure state and many fees not recoverable

0% interest and they don’t pay then you are losing money every month as they have no incentive to pay

Lastly having it at 0% and over priced from its value means if they don’t get a tenant then they just walk away as property is so upside down.

If it was me as a seller these are awful terms as a seller.

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Chris SeveneyBusiness Member
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Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
1y
@Douglas Schwart
I would run from this deal. Ohio is a lengthy foreclosure state and many fees not recoverable
0% interest and they don’t pay then you are losing money every month as they have no incentive to pay
Lastly having it at 0% and over priced from its value means if they don’t get a tenant then they just walk away as property is so upside down.
If it was me as a seller these are awful terms as a seller.
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Douglas Schwart
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Rental Property Investor · Columbus OHIO · Member since 2024 · 4 posts · 1 vote
1y
Chris
Thank you for your feedback...I will definitely reconsider the offer with my real estate agent on Monday.
Much appreciated
Doug
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Douglas Schwart
OP
Rental Property Investor · Columbus OHIO · Member since 2024 · 4 posts · 1 vote
1y
Chris...
The property is paid off...currently sitting empty...with needed minor repairs.
Trying to deferr Capital Gains Tax liability until my earned income is lower in retirement.
Would this change your mind?
Have you heard of Singh Development Company or dealt with them?
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Joe S.Pro Member
Investor · San Antonio · Member since 2020 · 3k+ posts · 3k+ votes
1y

Let me guess… The offer was thrown together by some VA on behalf of this LLC.
It really depends on your level of desperation and whether or not you need the money. I’m surprised they were dumb enough to jack the sales price up 70 K above retail. Their hopes are that the market will go up 70 K in the amount of time they allotted themselves. They will also save money on zero interest financing. $600 a month chances are they could rent it and make a profit and if it doesn’t go up as much as they were hoping they could simply give the house back to you in seven years. You just gotta weigh your pros and cons, brother.
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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
1y
Quote from @Chris Seveney:

@Douglas Schwart
I would run from this deal. Ohio is a lengthy foreclosure state and many fees not recoverable
0% interest and they don’t pay then you are losing money every month as they have no incentive to pay
Lastly having it at 0% and over priced from its value means if they don’t get a tenant then they just walk away as property is so upside down.
If it was me as a seller these are awful terms as a seller.

some gurus teach this method.. thats all this is.. seller is going to have to pay inputed interest to the IRS though.. to me it would depend on down payment.. If its little down or nothing down then of course this is a hard no..
this could be set up pretty easy to rip rents. Takes about 1.5 to 2 years to get the property back in Ohio..
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Bill B.
Investor · Las Vegas, NV · Member since 2013 · 8k+ posts · 10k+ votes
1y
Joe has the same opinion as me. You inflated the price $70k but they are only making $50k in payments. So in 7 years they could easily still owe more than it’s worth. So they basically did rental arbitrage on your property for 7 years and then walk away.
Think of it this way. It’s worth $200k. That means ar 7% interest they should be paying $1166 JUST IN INTEREST. That $98k you need just to break even. I don’t think I’d take the deal if they offered $1,200/mo, unless they put down $50k.
I wonder if they "purchase" the home with $600/mo. Do they own everything in it? Can they make a payment then remove all the appliances, the HVAC, etc etc. Then not make any more payments? Do they own that stuff? I mean sure. You could sue the LLC but I'm going to be they don't have any assets.
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Douglas Schwart
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Rental Property Investor · Columbus OHIO · Member since 2024 · 4 posts · 1 vote
1y
Thank you everyone for your feedback.
I have decided NOT to accept the offer from SINGH based on the responses I received on Biggerpockets along with some other insight...Logic prevails.
Thank you again
Doug
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