How To Make A Reasonable Offer Using Creative Financing To A Seller

[Ken M.]

If you are new, in this market, half the country is actually seeing price reductions. They tend to be places like California, Oregon, Washington, Idaho, Arizona, New Mexico, Texas, Georgia, Tennessee, and through out the west and south.

That means people who want to sell, are either accepting lower prices or accepting terms. Terms simply means you are offering them their price, but you are deciding under what conditions.

For instance, I recently found an off market property in Phoenix that is valued around $425,000. The people were getting behind on their payments so they wanted out.

I offered:

1. Slightly below value and to take over their loan.
2. To bring their payments current (which helps their credit)
3. To write a check for some cash so they could comfortably move and find a rental and have some left over.
4. They are “carrying back” the rest.
5. For them to set the date they would move.
6. To allow them to take what they wanted and leave what they don’t want and we’d donate that which can be donated and trash the rest.
7. We did a title search, cleared up their title and closed through escrow.
8. If you want more details, just ask.

We now own the property and make the payments at 3.5% instead of using a banks 6.5% interest rate. There were no realtor fees, so the seller saved about $25,000. It didn't need all of the delays that come from using the MLS and banks. No loan fees.

We do this for a couple of investors in CA and ID and charge a fee. But, it is always a great deal for the investor or we simply keep it. Sometimes people use us as a mentor to find a seller.

So, everybody wins in a tough market.