What are my options?

Question

Morning, I have a seller that wants more for a property that I am willing to pay, the house is paid off and what to see what other options I may have to turn this profitable.

1-buy it on terms/seller financing...what would this look like?

2-give the referral to a real estate agent that can list it...what kind of referral/finders fee should I get?

Austin Steed · Answer

Draft mortgage and note and get that seller financing done!

Joe Villeneuve · Answer

If there's a seller with 100% equity, I'm doing seller financing 100% of the time.

Scott E. · Answer

Sounds like you can still get this place for under market value. If I were you I'd try to wholesale it.

Theresa Harris · Answer

Whether or not the house is paid off, doesn't affect the sales price.  Is it overpriced?  Ask about seller financing, but they may just want to sell it and be done.  Look for another place if you can't come to an agreement on the price.

Joe Villeneuve · Answer

A seller with 100% equity is a potential goldmine for a REI.  It opens the door to turn what might seem as a property that is overpriced into one that costs less than it should/could.  The first thing you have to understand is what that actual cost is to the REI.  It isn't the asking price, and it isn't the asking price plus interest.  The only thing that costs the REI is the cash that comes out of their pocket...the rest is paid for by the tenant, which translates to the ultimate CF the REI keeps.  So what this really means is you have the 3 things that makes a great/good/bad/ugly deal:1 - Cost to the investor = cash out of pocket = down payment2 - The rest of the total cost of the property = principle balance plus the interest = someone/something else pays = terms3 - The resulting profit = equity =  and cash flow

So, the key to this type of deal is the minimum cost (DP) to the REI/buyer, and the correct terms that allows the REI to max out the CF.  This means if a property was worth $100k, but the asking price was $120k, the REI that went conventional at 20% DP would have paid $20k for the property.  However, the REI that paid $120k for that same property, if they only put up 10% DP, would have a cost of only $12k...less cost for a property due to using seller financing as the strategy.

Now, before someone says you can't get a 10% DP accepted, I would say they're wrong.  Does it work all the time?  No, but what does work all the time?  Furthermore, does it need to work all the time?  It's all a matter of how it's presented to the seller, and why/how the numbers work out much better financially for the seller this way.

It's also very important to structure the entity making the offer correctly.

Brandon Becsi · Answer

is that pretty simple to do? Whats average cost?

Eliott Elias · Answer

Seller financing is a great option. Just depends what you want to do with the property, if you’re looking to cash flow make sure the interest rate and amortization schedule makes it possible. in terms of finders fee you could just split commission with the agent

Brandon Becsi · Answer

Thanks everyone, yes in leaning more toward seller financing but dont know what a "basic" deal/terms look like?

Nicholas Misch · Answer

Also a great option! :)

What are my options?

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