Cash vs. Seller Financing
I locked up a property over the weekend here in Utah that I plan on flipping. The sellers agreed to our cash offer and we signed the REPC.
After signing Mr & Mrs Seller opened up about their plans more that her father is going to carry the mortgage for them on a property he had previously been renting. I asked them if that would be an option for us as well and they have been texting me about entertaining the idea. I want to see how the deal can be sweetened by seller-financing and would appreciate any help on formulating an offer. So here are the details on the deal.
174,000-Purchase Price
265,000-ARV
30,000-Rehab
90,000-Balance of Seller mortgage (approx. $84,000 in equity)
I have my Hard Money setup for the cash offer at 1 point and 11%.
My current thoughts were to present them with two offers
- 1-$15,000 down and increase the purchase price by $3,000 while we pay their PITI payment monthly
- 2-$84,000 (all equity) at the same purchase price as the cash offer and pay them monthly PITI with an extra $500
We dont close till July 31st so I have a minute to come up with an alternate offer just trying to crunch numbers and see if it actually benefits me this time to seller finance the deal.