Great off-market owner finance opportunity... struggling to structure it
Hi guys!
Through word-of-mouth, I've come across an off-market lakehouse in Sanford, Maine. This would be my first deal. This is kind of a long message but I'm also putting my thoughts into words.
About the house: It's a 3bd (easily can be 4), 3ba with a huge barn (old airplane hanger) that's been grandfathered in, built over the water with an additional bathroom and partially built ADU above w/ it's own meter. It has 150' of sandy water-frontage and I'm pretty confident I can get it for around $420,000... he's happy with only $20k down. It needs about $80,000 in renos, including septic and water being hooked up to the town lines and a roof. APV is $650,000. It's a perfect fix-n-flip. I would be getting a PML for the rehab via an investor (I am his rental property manager - he is also a licensed appraiser in ME, NH, and MA and going over there to get me accurate numbers today).
About the Seller: He owns the house outright and has since he bought it in 1984. He is a friend of a friend, of my girlfriend's family - elderly Vietnam Vet who lives next town over. He has no family and from I gathered, spends most of his time on his farm alone. I spent about 3hrs chit chatting with him last Thursday listening to his life stories, history on the house, his future plans, etc. He's had dozens of people try to buy but is, well... a tough shell to crack. He's old and set in his ways. He hates banks, realtors, and the government. Concerned about the value of the dollar and likes green cash. Most importantly, wants to pay as minimal capital gains as possible...
We ended the conversation with him saying "structure me a deal and let's talk. I'm not getting any younger and the house isn't getting any prettier".
My Question: Any ideas on how to make this possible? I feel like there's a lot of potential, but I am struggling to figure out the fine details of it. Want some ideas from you guys before I talk to an attorney familiar with creative financing.
Thanks a bunch!!!
Quote from @John Guy:
Hi guys!
Through word-of-mouth, I've come across an off-market lakehouse in Sanford, Maine. This would be my first deal. This is kind of a long message but I'm also putting my thoughts into words.
About the house: It's a 3bd (easily can be 4), 3ba with a huge barn (old airplane hanger) that's been grandfathered in, built over the water with an additional bathroom and partially built ADU above w/ it's own meter. It has 150' of sandy water-frontage and I'm pretty confident I can get it for around $420,000... he's happy with only $20k down. It needs about $80,000 in renos, including septic and water being hooked up to the town lines and a roof. APV is $650,000. It's a perfect fix-n-flip. I would be getting a PML for the rehab via an investor (I am his rental property manager - he is also a licensed appraiser in ME, NH, and MA and going over there to get me accurate numbers today).
About the Seller: He owns the house outright and has since he bought it in 1984. He is a friend of a friend, of my girlfriend's family - elderly Vietnam Vet who lives next town over. He has no family and from I gathered, spends most of his time on his farm alone. I spent about 3hrs chit chatting with him last Thursday listening to his life stories, history on the house, his future plans, etc. He's had dozens of people try to buy but is, well... a tough shell to crack. He's old and set in his ways. He hates banks, realtors, and the government. Concerned about the value of the dollar and likes green cash. Most importantly, wants to pay as minimal capital gains as possible...
We ended the conversation with him saying "structure me a deal and let's talk. I'm not getting any younger and the house isn't getting any prettier".
My Question: Any ideas on how to make this possible? I feel like there's a lot of potential, but I am struggling to figure out the fine details of it. Want some ideas from you guys before I talk to an attorney familiar with creative financing.
Thanks a bunch!!!
Hey there. Feel free to reach out. Here's how I would break this down:
1. Make a paper plan. There are a few templates out there, but have this written down.
2. Have the number clear and non-insulting. The man just wants to see a final number. Buy it "as is" so he can take what he cares about out of the house and you handle the rest.
3. Wholesale contracts are a good place to start for paper ideas. Maybe a lawyer is another good route as well for just documents. You need something clean.
4. Does he have another place to live, is this his primary residence, or is this a vacation home? If he needs a place to live, then you'll want to solve that other piece of the puzzle.
Owner financing deals are as clean or messy as people make them out to be. I've done one before and it was incredibly non-cholent. I had a 2 page document (similar to a lease agreement on initial terms), paper in hand and money in the other hand. Deal was done.
