I am currently in the process of trying to make my first real estate deal. I am looking to buy and hold a single family home in Maine with 6 bedrooms. Conservitively it should cash flow about $600/month.
However, I am having trouble getting financing since the loan amount would be under $100k. The owner passed away and his children are now trying to sell it. The ask price is $110k but the owners are willing to work on that based off of work needed. I am a plumber by trade (work as a plumbing engineer) and I have walked through the house and it doesn't appear to need much work at all. I have about $10k I could put towards a down payment.
Do you think that this would be a good place to try to do seller financing? Any other ideas?
Most lenders will do loans as low as $50k. If your lender is not willing to go lower than $100k you may want to shop around. Regardless, if owner financing is an option that may be preferable to any bank loan.
They would be willing to lend but they would require me to put down 25%, the banker was telling me that it was because of some new fannie and freddie laws within the last couple of yeads.
20-25% down is pretty much the standard if you aren't going to owner occupy. If nothing else see if you can get the seller to hold the 25% while you pay them the other 75% with a bank loan. A 5yr note at a 20yr amort with a balloon at the end may be attractive to them. Each situation is different, though, so create something that works for you.
Ryan, thank you for the input! I am actually working on that right now.
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