Ballston Lake, NY · Member since 2017 · 6 posts · 0 votes
So, I want to make money in real estate. I did a bunch of research, BP, Youtube, talked to couple realtors, talked to an attorney (who thought I was crazy...), and found a property on Craigslist, made an offer, re negotiated and was still turned down. She didn't think my offer of monthly payments to her in exchange for the property would be a good idea. She has a mortgage, and 50% equity. I explained her monthly costs associated with all expenses were likely creating negative cash flow and I was offering her a way to make money each month without having to be a landlord. Any advice on how I could have approached this differently? What is the best strategy for finding an agreement with someone who likely wants to sell, has a mortgage but significant equity, that would be a good move for me?
Ballston Lake, NY · Member since 2017 · 6 posts · 0 votes
9y
I offered 6% down. I did not explain to her the mortgage would not transfer to me until paid in full... probably because I didn't understand that until right now! Thanks. Have you done a deal like this, was it/they successful?
Investor · Orlando, FL · Member since 2017 · 80 posts · 39 votes
9y
You might have come off very strong or the seller took it like they are dumb and you know all mentality.
This is what I am working on:
You can always try the 3 Offer Approach
1st Offer (Lowball) All Cash (Make sure you have the cash to close or you're just wasting everyone's time)
2nd Offer Little Better but you want to set them up for the last offer
20% Down 0% interest with payments over time
3rd Offer Full Price or More
20% down 0% interest with payments over time
Why would I offer more than they want? by over paying 20K or more (and them saying yes to 0%) I am saving on the Interest during the loan term.
I would do a smaller loan term:
1. Are you going to keep this for 30 years? Maybe in a Land Trust so it passes to your Children, etc.
2. Are you going to try to BRRRR? (Where is the Equity if you have 30 years? you need to wait till year 7 or 10 before you can try to pull anything out)
3. Smaller Loan Term gets Equity Faster and Mortgage paid down faster
Ballston Lake, NY · Member since 2017 · 6 posts · 0 votes
9y
I told her I would offer full asking price, 25yr term zero interest rate. Yes i did the calcs for amortizing and see the huge benefit of interest on a deal to prospective buyer (owner financing) if I charged 6% interest. I don't quite know how to deal with the fact the seller has a mortgage with 50% equity. Do I offer to cover her mortgage payment plus couple hundred a month, with the goal of getting a buyer? I am having trouble wrapping my head around this all which is why I am stumbling with creating an enticing deal for the seller that would also be a good deal for me.
Ballston Lake, NY · Member since 2017 · 6 posts · 0 votes
9y
I like the idea of keeping the property for years if I could find a way to make the seller happy, and getting a buyer in with terms they are happy with, and me in the middle profiting monthly. I am familiar with the BRRRR, i do not want to be a landlord. I really am interested in owner financing to a prospective buyer. Cash up front to me, cash income monthly, and cash lump sum when I sell the mortgage, and I dont have to be a landlord. I just dont know if this is possible unless I find someone who owns their property free and clear.