So i've been actively prospecting while trying to find wholesale/ flips and I found a seller today who owns a duplex he said he's trying to eventually wash his hands of. He mentioned that he's concerned about the amount of taxes he'll pay if he sells it and his reason for selling is to pay off his sons student loan debt. I brought up the idea of seller financing because he owns it outright and I was curious how you more seasoned investors would pitch it to him (and i have none of my own money to put into it) so it works out for him with taxes and with me getting into the property. It's rented out and the rents are below market one side is 950 the other is 825. Market rents for the area being a college town are 1150 each side (Conservatively) and it needs a new roof and some touch up curbside.
My Initial thought would be: For him to carry 50% of the $200,000 offer price and have it be interest only for 3 years at 5% and to finance the other 50% through the bank. This way he gets some money upfront to pay off debts and earns a little more than the property should sell for based on condition. It also allows me to cash flow a little bit right away to save up for the eventual repairs.
Also open to partnering ideas because i know a few investors looking to pick up duplexes and how you would structure a partnership.
(ARV on duplexes with market rents are typically 250-275 for older builds but have seen some sell at 300k)
I would start at 100% financing at 5% Ammoritization on a 30 yr fixed. You’ll find out how motivated he is once he responds.
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