New to Real Estate · Vancouver, British Columbia · Member since 2022 · 157 posts · 86 votes
Hello BP I have a few newbie questions.
Most likely this offer won't get accepted, but I think this will be a good tool to learn. Quadplex is listed for 375k on market for about 10 days. I'm going to make one straight offer at 330k and another seller-financed offer at 375k, 6% interest only, 5% down, balloon payment 5 years with no pre-payment penalty.
-375k x .06 = 22 500 ( is this how I would find my total interest owed? ) Meaning total owed at 5 years is 397,500?
-Would tax and insurance payments be sent to the seller?
-How can I sell this more to the seller. Would they be able to avoid capital gains taxes by going this route?
-I am using a realtor to make offers, and have not made any seller-financed offers yet. Would this impact how he gets paid?
Most likely this offer won't get accepted, but I think this will be a good tool to learn. Quadplex is listed for 375k on market for about 10 days. I'm going to make one straight offer at 330k and another seller-financed offer at 375k, 6% interest only, 5% down, balloon payment 5 years with no pre-payment penalty.
-375k x .06 = 22 500 ( is this how I would find my total interest owed? ) Meaning total owed at 5 years is 397,500?
-Would tax and insurance payments be sent to the seller?
-How can I sell this more to the seller. Would they be able to avoid capital gains taxes by going this route?
-I am using a realtor to make offers, and have not made any seller-financed offers yet. Would this impact how he gets paid?
First, I never offer with too many zeroes. Make it specific like it came from your calculator.
The balance of an interest only stays the same every month. Yeah, you'll pay $22k over the year, but the payment is made monthly, bringing your balance to what you borrowed.
I sold 2 large buildings with interest only SF this year, but most sellers will flinch. The principal pay-down is peanuts anyway, so I wouldn't get too hung up on it or even mention it initially.
Tax and insurance is paid by the owner, which should be you. Annual pmt to insurance, bi-annual taxes to the county.
Your realtor gets paid from your down payment. If the seller needs 10% down net, you will put down that plus your realtor. I've purchased a few dozen with SF and never used an agent. Tired landlords, off-market.
If you are using a realtor they should be working with you on how to sell it to the seller, relying on their experience. The tax and insurance are likely based on where you are and local rules so I would ask your realtor to help you through that as they should know.
Most likely this offer won't get accepted, but I think this will be a good tool to learn. Quadplex is listed for 375k on market for about 10 days. I'm going to make one straight offer at 330k and another seller-financed offer at 375k, 6% interest only, 5% down, balloon payment 5 years with no pre-payment penalty.
-375k x .06 = 22 500 ( is this how I would find my total interest owed? ) Meaning total owed at 5 years is 397,500?
-Would tax and insurance payments be sent to the seller?
-How can I sell this more to the seller. Would they be able to avoid capital gains taxes by going this route?
-I am using a realtor to make offers, and have not made any seller-financed offers yet. Would this impact how he gets paid?
First, I never offer with too many zeroes. Make it specific like it came from your calculator.
The balance of an interest only stays the same every month. Yeah, you'll pay $22k over the year, but the payment is made monthly, bringing your balance to what you borrowed.
I sold 2 large buildings with interest only SF this year, but most sellers will flinch. The principal pay-down is peanuts anyway, so I wouldn't get too hung up on it or even mention it initially.
Tax and insurance is paid by the owner, which should be you. Annual pmt to insurance, bi-annual taxes to the county.
Your realtor gets paid from your down payment. If the seller needs 10% down net, you will put down that plus your realtor. I've purchased a few dozen with SF and never used an agent. Tired landlords, off-market.
Investor · Austin, TX · Member since 2021 · 9k+ posts · 5k+ votes
3y
You would be responsible for taxes/insurance. The seller may request to have them escrowed in the monthly payments. Your realtor is going to get 3% so really you're putting 2% down assuming the seller doesn't have a realtor.