I ran across this seller that wants to sell his home for $100,000 and the home is worth around $150,000. The homes in the area are selling around $130,000 on up. He's interested in cash but currently I don't have that kind of cash to obtain his house. Is there anyway I could buy his home maybe with a loan or something of that type. My credit score is in the 500s by the way. How can I work out and structure a deal with this person? Please if you can give me any strategies and tips. Any information would be greatly appreciated. Thanks!
Is he willing to carry a loan for the full amount?
With a credit score in the 500's, getting a loan is going to be very challenging. Do you have a good down payment? That is, 25% or more? Are you otherwise qualified (good income?) Do you know anyone who would loan you this money?
Hello Jon, thanks for responding! I'm not sure if he's willing to carry a loan for the full amount. I never approached him about that and I don't know how to. I don't know of anyone who would loan me this amount :( It is such a good deal I thought I would bring it up and maybe find someone who knew what to do or could give me some advice.
Your two single best possibilities of financing are from either the seller or someone you already know.
A hard money lender is going to want to see 1) an exit plan and 2) most likely some of your own cash into the deal.
Even if its worth $150K its not a screaming deal. Seems likely it needs work. If it was worth $150K as is, why didn't the seller just put it on the MLS?
I don't think the seller knows exactly how much the house is worth and he was debating if he wanted to sell the house. Which hard money lenders could I work with?
I'm pretty new to real estate investing from the point of view of doing deals. In the past I just put my money in and got percentage of the profits. I didn't know anywhere near as much as I know now or I would have made the jump a long time ago, but now I have arrived, so this is just my take on it.
I agree with Jon, if is was that much of a screaming deal he probably would have MLS it. See if he will carry the note, don't be afraid to ask. You could start the convo by asking him would he be willing to get creative with the financing and work your way into asking about owner finance and how its a better investment then putting his money in an 401K or stocks, etc.
On another note you could always try talking him down a little and trying to do a wholesale deal or pull off a double closing.
I have seen many investors get stuck on deals or do things the wrong way so I do have experience on what not to do(if you know what I mean), don't worry to hard if you cannot pull this one off, another one is around the corner.
I just ran across a similar deal and the first replay was "no way" to seller financing. It seems this is usually the first reply due to the fact that they don't know what the heck you're talking about. I would agree though, that even if you are successful in working out some creative financing, this doesn't seem like a screamin' deal. Make sure its worth all the effort.