Seller Financing Proposal

[David Turner]

Hi All! I’m new to Rehabbing and trying to get creative with finding deals and funding them with OPM that are worth the cost of funds. I’m about to make a proposal for Owner Financing but I’m not sure that I have all my bases covered. Please share any tips or advice that you might have!

Deal Basics:

Purchase Price: $150,000

ARV: $310,000

Rehab estimate: $80,000

I’m thinking to offer the Seller $75k down payment, and he finances the other $75k, interest only for 6 months. Standard P&I payments after 6 months, with a balloon at 18 months (so he can get out).

I plan to get Hard Money for the $75k down payment and $80k rehab costs and estimate the project to take 6 months to finish & sell.

I’d be all-in for about $245-250k after 6 months holding costs. My backup would be to refi & rent if needed as this is in a desirable part of town.

Are there any gaping holes in this idea? Anything I need to consider?

Thanks and I appreciate the feedback!

[Wayne Brooks]

Both the seller and the HML will want a first mtg, and the HML may not allow a second mtg.