Buying my Grandpas Rental property

Creative Real Estate Financing
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Buying my Grandpas Rental property

Jaron Smith
Amherst, OH · Member since 2017 · 43 posts · 9 votes

Hey everyone,

My grandpa lately has tossed around the idea of selling me his SFR Rental property. However I just closed on a triplex yesterday. My question is how can I get creative in acquiring my grandpas property without having 20% down right now?

Thanks y'all!

Jaron

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Account Closed
Real Estate Agent · Saraland, AL · Member since 2016 · 7 posts · 5 votes
9y
Why don't you ask him if he'll owner finance it for you? Y'all could come to an agreement that works well for the both of you. Maybe he'll let you just put 5% down with a 5-6% interest rate. He may even give you better terms since he's your grandfather. He'll need to record a deed of trust and then after a year or 2, you could go to the bank and refinance.
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  • Account Closed
    Real Estate Agent · Saraland, AL · Member since 2016 · 7 posts · 5 votes
    9y
    Why don't you ask him if he'll owner finance it for you? Y'all could come to an agreement that works well for the both of you. Maybe he'll let you just put 5% down with a 5-6% interest rate. He may even give you better terms since he's your grandfather. He'll need to record a deed of trust and then after a year or 2, you could go to the bank and refinance.
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  • Steve OlsonPro Member
    Real Estate Agent · Pleasant Grove UT and Hurst, TX · Member since 2014 · 128 posts · 63 votes
    9y

    @Account Closed nailed it. If you don't have the 20% plus closing costs, maybe gramps will cut you a deal. Just record that deed of trust and then do the refinance when you're able, or even better if it goes up in value and you end up with the needed equity spread! Good luck!

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  • Jaron Smith
    OP
    Amherst, OH · Member since 2017 · 43 posts · 9 votes
    9y

    Thanks @Account Closed,

    How do I go about structuring a seller finance deal? Do I create a contract myself? go to a lawyer? My initial Idea was I pay him $400/Month, and I cashflow about $200-$250 a month for up to 18 Months where I then expect to take a traditional loan out by that time. he has no mortgage payment and the rent is $650 a month and would sell it to me for 30k... it is a decent little house in a "c" neighborhood..

    Thanks and have a great day!

    Jaron

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  • Scot M.
    Investor · Rock Hill, SC · Member since 2015 · 6 posts · 2 votes
    9y

    Yes, @Jaron Smith. You will want to get an attorney to draw up the contract. Filing the necessary paperwork at the courthouse is a must. Good luck to you!!

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  • Mindy JensenPro Member
    BiggerPockets Money Podcast Host · Longmont, CO · Member since 2014 · 7k+ posts · 10k+ votes
    9y

    @Jaron Smith , +1 for the attorney. Since this is a transaction between family, you don't want a relative coming back to you in a few years, claiming you stole it from Grandpa, or claiming some portion of it as their own. Get it all clearly written out now.

    [email protected]Podcast Guest on Show #261
    BiggerPockets
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  • Steve Vaughan
    Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
    9y

    For my SF deals, I just take the signed purchase and sale agreement that has the boiler plate method of financing addendum to a title co.  It's the same PSA realtors use, the title co's and attorneys are most familiar with it. The title co works with attorneys that draft these up all the time.  Usually costs about $300 this way.

    Check online to get a standard PSA for your state.  Sign it with gramps, have EM and open escrow at a title co @Jaron Smith.

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