Seller finance deal advice
Hey guys, I have come a across a seller finance deal here in central CT, I am trying to make it work. The initial numbers aren't great but I'm trying to see how much I can work with the seller on this.
Backstory: seller and his wife moved out to CT for a job, which is now ending, and he is looking to sell his house here and move back to CA where he owns another residence. He is considering seller finance because he would like to give his wife some residual income.
-Specs:
3 bed, 1bath in Bristol CT
1,095 sq ft
It has another lot attached to it, I believe behind the property, I'm going to see it this Saturday
-Taxes:
~2500/yr (this doesn't include the other lot, I need to ask what he pays for them both)
-Initial home offer:
150,000 (defenitely could talk him down)
Needs a 15k down payment (nothing lower)
-Estimated rent:
1200 if rented as one unit I'm considering piecing out the rooms, might be able to get 14-1500 that way
As it stands at that price and a normal 30 yr fixed rate at 4% and money set aside for capex, maintenance etc, the deal is losing about 50 bucks a month, however this is a seller finance and a lot of numbers can be worked on.
I'm thinking of offering 125,000 (before 15k down) with a a 40 yr fixed rate at, maybe at a little under 4%, these numbers look better, leaves a little over 150 dollars in my pocket and a little over 10% Cash on cash return.
Do you think this is a reasonable offer to make in such a situation? I'm not sure how old the couple is, (haven't met yet) but 40 years is certainly a long time to hold a mortgage, and I'm not sure how great the terms will be for them he mentioned he's looking for around a 4-5% api
Any thoughts on the deal? Any experience you've had with long term seller finance deals? Or seller finance in general? Are there a lot of hoops to jump through in a seller finance deal like this? Do we still need an agent to help us close the deal?
I know this is a lot of information to sparse but any advice would be greatly appreciated!!