Creative financing

5 Replies

So a family member just inherited a house (My wifes grandmother inherited the grandmothers sisters house when she passed away) and she wants to sell it.  My wife and I would like to buy it BUT she only wants around $50,000 for it.  I am having problems finding anyone to finance it because of its low purchase price. 

My mortgage broker says they only finance $50,000 loan min. with 20% down making a purchase price having to be around $67,000 since its an investment property.

I recently let some other properties go that I found on the MLS because of low purchase prices as well.

Am I better off trying local banks?  i tried to get her to finance me with a balloon loan but she didnt sound interested.  She wants her money all at once.  What type of loan should I be asking for?

How much is the home worth?

Would she be willing to do seller financing? Give her a 20% down payment and carry the rest over 5yrs.

Otherwise, what is property worth? If it's worth $100k, then a bank will work with you regardless of what she wants to sell it for.

@John Nisewonger  

Some banks will write a conventional mortgage on sub 50k amounts.  I know TD bank does as I used them for a deal in Jan 2014.  

It is a standard mortgage, nothing odd about it.

Have you run comps for the property?

I heard some local banks will do loans for less than $50k but haven't found one yet. 

House needs about $10,000 worth of work.  Is a cookie cutter rancher style house around 900-1000 sq ft.  Usually sell around $85-90 in the area after repair condition.

I wanted to rent out the house for around $850/mo and give her around $600/mo for payments.  I wanted to do a balloon style loan maybe a % down and the $600/mo payments for like 3 years or so.  The grandmother said she wanted all money up front but maybe if I wave $10k in front of her she will let me do payments.  Maybe they think we wont make payments who knows. Id have a contract either way to protect myself and her interests.

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