Seller finance property AND closing costs?

Question

I found a multifamily property that is open to owner financing the entire property, but I do not have any money for closing costs Is it possible to add the closing costs to the note the seller will be holding, if the seller pays closing costs?

Example - Seller agreed to finance 600k deal

Closing costs - 18k

New agreed upon price is 618k (18k over list price) because they are paying closing costs

Deal will still cash flow

What other methods are there to solving this issue?

Thanks

Jon

Wayne Brooks · Answer

Whenever a seller offers 100% financing, they are trying to make their problem, your problem. With no cash reserves, vacancies, repairs and major repairs will kill you.

Steve Hodgdon · Answer

Remember when real estate collapsed in 08? Are you prepared for that again? Can you afford to feed the project if everything goes sideways outside of your control. Took me 8 years to climb back from a purchase in 12/06 that was worth 1/2 what I paid for it in 3/08.

Russell Brazil · Answer

It is highly unlikely someone will pay $18k to get rid of their property.

If you are that committed to the property, take out a personal loan for the closing costs.

Ned Carey · Answer

@Jon Mark yes it is possible to for the seller to finance the closing costs as you suggest. The seller can loan you as much as he or she wants. But does the closer have the money to pull out of their pocket to pay those costs?

Your comment about being broke tells me this is a high risk deal. I certainly wouldn't sell to you and absolutely would not pay closing costs. You are going to be stuck the first time a problem comes up.

Jason G. · Answer

Just curious, if you do not have closing costs, do you have reserves?

Don Konipol · Answer

"When you ain't got nothin, you got nothin to lose" - Bob Dylan, 'Like a Rolling Stone'

Daniel Kong · Answer

@Jon Mark Its really up to the seller if they will offer that or not. Like it was said up there, it might be more attractive to the seller if you offer say 630k to give them an incentive to allow you to put zero down. Another alternative would be to partner on the deal with someone else who could bring in the closing costs/cash reserves or take out a personal line of credit if your credit score/DTI is good enouh.

Dave Skow · Answer

Jon - you can certainly ask the seller to do this ...you might agree to a slightly higher note rate to make the counter offer a bit more appealing

Seller finance property AND closing costs?

Seller finance property AND closing costs?

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