a guy wants to sell his house. i gave him my number and explained to him all the costs involved. i told him the 12% lending costs, the property taxes, condo fees, ins, repairs, and my 20k profit , and closing costs and everything else in the 6 month process.
he said. how about, we keep the property in my name, and i pay all the costs within the 6 month period while you pput 15k of work into the house . and then you assign the P&S contract to the new buyer so we dont have to pay two sets of closing costs.
would this work? too risky?
obviously the contract would have to be written up very nicely.
I wouldn't but maybe others have been successful with something like this.
also. if nobody thinks that this is a good idea. he could seller finance at 0% interest right? how would i make it so he pays all property taxes and stuff along with the loan though?
Do you trust this person? Even if you have a great contract, if they decide they don't want to honor it, they can make things a real pain in the butt. Why does the seller want to stay in the house while it is being repaired - are they not living in the property? What do they have to gain?
he wont be living it is. i am going to give him a down payment. it is giving him more money that i can offer... as i am typing this is came to me that, if they are going to pay for property taxes anyway, why not just subtract it as i normally would.
either they pay for all the holding costs, or i just subtract is from my offer.
he also doesnt want me to pay the loan fees. so could he seller finance at 0% interest?
I see, so you showed him all of your costs and now he wants to mitigate some of those costs so you will pay him more money. How do you plan on eliminating one set of closing costs while still ensuring you your piece of the deal? To be honest, unless the deal is contingent on you giving him a better price, I personally wouldn't risk it. That said, if you can get 0% seller finance (not my area of expertise) and keep a cut of the savings for yourself, that may be worth it.
Honestly, I don't TRUST anyone in this business but me. I know that sounds awful but i find it is best when you get everything in writing. What prevent him from not taking it and running. I have some AMAZING friends in this business but I still like to stay on top o fit. I trust them to do their job but I still participate ;)
That being said everyone has a different thought. Our model is crazy but it works for us.
@Jim Hopsin Basically what you're doing is putting $15K in repairs into someone else's house. You can write an agreement up, but to enforce the agreement you would have to go to court. This is going to be time consuming and costly. This is not the way to go.
Free eBook from BiggerPockets!
Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!
- Actionable advice for getting started,
- Discover the 10 Most Lucrative Real Estate Niches,
- Learn how to get started with or without money,
- Explore Real-Life Strategies for Building Wealth,
- And a LOT more.
Sign up below to download the eBook for FREE today!
We hate spam just as much as you
Join the Largest Real Estate Investing Community
Basic membership is free, forever.