owner will carry on five homes...
I went for a revisit and coffee session today .After some time, her homes came up for conversation.
Here's the break down....
Five homes free and clear,
owner 82 years old/ daughter 55 years old
Income cashflow:$3025 per month
Expenses (taxes/insur): $890 per month
Current market value: $350K
Repairs: none, all homes have long term tenants and need nothing at this point
So she asked what I thought about the homes and what I planned to do if I bought them. I honestly told her I would like to keep them long term as income and for my kids in the future. I then told her what the market values were and she grimaced, stating that she would rather die versus selling them for current market price ($350K). So then I remembered reading that Jack Miller says its ok to pay more as long as the terms work out. So I presented to her that I can buy them for her asking price of 600K only if she carries paper. She asked how much I wanted to put down and I told her I had my money tied up. So said " no problem can you make balloon payments on the down".
She's willing to carry the whole package deal with nothing down. She'll get $2,070 a month for 30 years with 1.75%.
She mentioned that the interest is low and she normally would ask for 7% and that in 30 years she or her daughter won't be alive. She has no other heirs nor wants to give to any charities. She mentions a 15 year note. So I figure I would present to her again the fact that she'll collect 2k a month and every five years I can give her a 25K balloon payment for the 100k she wanted down. She liked that idea but then asked about the closing cost and 3.5% state taxes she'll pay on the sale of each home. I told her I'll go to title and get an exact amount to close and inquire on how to divert those taxes. I think if I cover the closing and work some way for her not to pay the taxes...she'll move on the deal. She is not interested in a lease option as she stated that if she sells, she wants title to transfer, get away from paying taxes and insurance and carry the paper.
We so are close to making this deal... I just need some help on the lose ends. We'll meet again soon.
What if she mentions that 7% interest rate again?
What if she mentions the " we won't be around in 30 years again"?
Is there any way to get away from her paying those taxes to the state?