Bank Open to Contract for Deed. Enticing them with Terms?
I’ve put in a verbal offer on a duplex in a small Midwest city. It is a pre-foreclosure and recently dropped in price by 25%. It has some potential foundation issues that have scared people away, but at the lower price it’s gaining a lot of interest. The realtor I’m working with has been in discussions with the bank and not with the seller. It seems that the seller just wants to be free and get out with no long-term damage to credit. They also just want a little bit to move closer to family. They owe approximately $50k and the bank says they need close to $60k to cover all the fees and make everyone whole. they have received multiple offers. My realtor suggested a higher be offer to make the bank more willing to except a contract for deed. It is listed at $59,900. I’m considering offering $62k with $12k down and a payment of $600 to the bank, approximately $80 more than what the current seller is paying with the extra going towards the principal. And a three-year balloon on the rest. The numbers for cash flow ($150/unit) and cash on cash return (15+%) after expenses still work out very healthy. Have any of you ever done this sort of a deal that involves a bank negotiating a potential contract for deed?