Seller Financing Question

1 Reply

Hi All. Hoping to gain some insight on a potential rental I’m trying to purchase.  

This property is 2 duplexes on one lot. The town will not allow the owner to subdivide it due to road frontage requirements. I'm fairly certain there are no comps for the appraisal so I don't think any bank will finance it unless the appraiser has some creative way of making this happen.

The seller wants 250k for the parcel. Rents total $4400 and probably have room to increase 100-150 per unit right now.  Being somewhat of a newbie, (I have two rentals currently) I like these numbers and think that it is a good deal.  However, I will still try to negotiate the price down.  

My main questions are, how should I go about pitching the idea of seller financing to the owner?  And how should I structure the deal?   The owner is my neighbor’s father who is retiring and moving South.  He has a handful of multifamily rentals in my area and I would love to buy them all so it’s important to me that this is an amicable experience and we both get a fair deal in order to work together on the other properties. 

Thanks in advance for any insight. Appreciate you taking the time to read my post!

I always pose the idea of cash flow in seller financing. "Wouldn't it be awesome if you could continue to get cash flow from these properties, move south, and not have to worry about any of the maintenance and headaches?"

Of course they would! Find out what they NEED out of the deal and then structure it in a way that solves their problem and creates a winning situation for you too! They might tell you then need 10-15k to make it south. So you tell them you'll give them the 15k if they will carry the rest for a certain period of time and whatever rate. 

Always look to create a win-win and the structure of the deal typically figures itself out