I Found a Motivated Seller - Strategy Advice?

2 Replies

BPers,

I am seeking some advice on what my best options are, if any, with a motivated seller I have come across in my neighborhood.  

I noticed some new vehicles at a distressed house in the neighborhood and there was an older couple working hard to clean it up.  I assumed they were the owners so I rode my bike by the place and said hello, striking up a conversation with the woman.  Long story short I got a tour of the property, a 3 bed, 1 bathroom house with detached garage which fits nicely within my rental property criteria.  

The owners are an older couple (early 70's?) who currently still owe $48,000 on the house.  The husband is handicapped and unable to do much work to help clean it up.  They typically would be in Florida (we are in Indiana) for the season by now but they kicked their own son out of this house so want to get it fixed up and on the market by November 1.  I mentioned that I buy properties that are distressed and fix them up typically to rent.  This piqued her interest as she was exhausted and very frustrated with the situation. (She mentioned disowning their son for what he did to the house etc)  I asked them to get me a price for what they would want for the house if they were to stop working now and sell it as is.  I am waiting to hear back and they insinuated it would be around what they owe.  

I believe the ARV on this home is around $65-70k and it needs about $5000 worth of materials if I do most of the work (I would rent the property out but I include this information in case an appraisal and refi is a possible strategy) My typical rental criteria is all in for $30-$40k cash and renting at about the 2% rule (700-800/month). This property would rent for 775-800. I am achieving 10-14% return on my other investment properties and would like to stay above a 10% return with this one as well.

So, since I will not pay 48,000 for the property is there opportunity to create a Win Win here with owner financing or something similar?  I do not know their monthly payment yet, but do plan to find this out.  

I think you answered your own question, some sort of seller finance would be how I would proceed. If you take the project subject to, you would want to fix and flip or refi it after the first six  months. I don't think subject to would be the bes bet for long term financing. 

Medium logo sharp clearChris Music, Proud Start, LLC | [email protected] | 925‑322‑1008 | http://PSBuysHouses.com

There's always the fallback of "sub-2" Give them some cash down ($3-5K) and take over payments. You're not getting the house at your lower amount but since its leveraged for you with little down, you're well ahead of your ROI numbers. One downside with the older couple is the issue with the current loan should both die.

Medium investnwiAdrien S., Invest NWI | [email protected] | 219‑237‑9088 | http://www.investnwi.com

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