Seller's financing the best bet for me?

25 Replies

Hey guys, 

I have a friend list his newly remodeled home in Charleston SC, and hasn't been able to sale it. It's been on the market for about two months and they've reduced the price twice. I'd like to be able to help, would seller's financing be the best bet? It's not at a good price point but want to explore all my options.

Thanks for your help!

Courtney Richards

Seller carry? Do they own it outright? is the title clear?

I would ask them about adding a refi and other clauses so you can balloon it or have other options when you find better terms.

I have a multi tier offer proposal template if you'd like to give them 3 options that all favor you.

Originally posted by @Courtney Richards :

They're still paying on mortgage, so they do now own it outright unfortunately.

You could offer a lease option and rent the property from them for their mortgage payment with an agreed upon future purchase price. If the rent spread makes sense you can then put your own lease option tenant in there and rent it out for market value and have the buyer's option sale price to be higher than the one you negotiated with the current owners. You would collect the difference in cash flow and then if the buyer purchased down the road you would collect the difference in purchase prices. I'm doing this with a single family home in my area right now and it works out well for all parties.

You say it's not at a good price point? What sort of price point are we talking about? If it's too high I don't think this option will work well.

Courtney, not trying to be smart but I have to ask... if they've been unable to sell it, why do you want to buy it?   Would you be offering a much lower price?   Unless it's in a fantastic location (historic district, deep water, etc) it might be hard to make a $389k/2293 sqft house cash flow.

Getting that to cashflow will require a very high understanding of the local market. Cashflowing isn't necessary if you get it free (100% financed) but you don't want to be cashflowing negative and you don't want to be fully leveraged. One way or another you need to get a bargain on a house that costs that much for that size. 

I think the best bet is for them to reduce the price. Getting a property of this value to work on a subject to lease option sounds outside of the bread and butter of that strategy.