Giving the seller some options???

3 Replies

I have a slightly motivated seller and i want to give him multiple options for my offer. How do you guys value owner financing and terms in an offer. Here are my approximate numbers.

Class c+/b- in conroe / houston texas


Arv 105,000

He casually WANTS 70 to 80k

Lets just say repairs are 10k

So a by the book offer of 70% arv less rehab would be 63,500

What kind of offer would you give if they where willing to owner finance? What additional costs are involved with buying with owner financing in texas? How would an experienced investor structure an owner finance deal here? 

My thoughts on offers 

Offer 70k, 10k down, 60k interest only for up to 2 years, refinance exit strategy

Offer 70k, 5k down, 65k 15 year note @ 3.5%,  could keep note or refinance or sell to another on better owner financing terms?

Any other options you pros would pursue?  I feel there is a deal to be had here. 


If any experienced locals are interested in exploring this as a partnership let me know. 

I just got a seller to accept an owner's finance offer. She was a landlord so it wasn't hard. She wanted to sell for more than what I wanted. I told her one of the ways we get sellers their full asking price is by doing owner's financing. It's our way of compromising and giving them what they want.

I sent her a letter stating the benefits, the ugly taxes, and negatives of being a landlord. I wrote a letter because if I tell you something, you will remember a little bit after we talk. With a letter, they can go back and read it over and over. It came out to be about a page long. I was saying the same thing over and over again, but using it in a different way each time. The key is repetition. How many times have you started liking a song because you hear it all day? I could be completely wrong, but it worked and I will do it again.

I asked if she liked getting a check every month without having to worry about repairs or problem tenants. Money every month without all of the headaches. I showed her a breakdown of all the closing costs and how taxes would be taken. The total amount after all expenses was way less than what she expected. I presented her with 2 seller financing offers. That way she can still feel in control. There was no mention of interest. Offer was monthly payment until paid off.

I have found with seller-financed offers, the less details the better.  I outline a couple or 3 broad-stroke ideas in a letter of intent.  I may refer to 'market rates' and/or rates 400% better than bank deposit rates.  Interest only and all that tends to sound complicated and confusing.  The less down and such = higher price, obviously.  Each option I outline has a different correlating price.

Also - with good terms, I have found I cannot also get 70%-repairs.  That is usually an all-cash, quick close price.   That can be your first option.  Go up from there with terms @Mike Landry

Thanks guys.  This might be a deal that works itself out over the next month as nothing is moving fast for the seller as of now.  The thing I struggle with is that I don't want much, if any, of my cash invested in a class c rental.  I'm leaning towards partnering up with a local wholesaler I know and making a small $. 

Cool thing is the seller called me from a letter I mailed last fall.  Its amazing how I have had about 4 recent phone calls from letter I mailed 6+ months ago.  Although I only mailed one round out, I can see how a 6 month campaign could work wonders.

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