Help with creatively financing this first deal.
Lately, I have been trying to make my first deal, hopefully by the end of the year. I want to send this out into the forum to see what others think.
I met someone at Jury Duty and when we started talking I let him know that I am an aspiring REI. I tell this to everyone I meet hoping that some opportunity will come of it. The more I spoke with this man the more he disclosed. Here is his situation:
His parents died and left him the house. He is 58 with no job or income, only a couple friends who give him some money to live in his basement. He is behind on his taxes and utilities and his house needs many repairs and updates. It is in a B+ to A neighborhood where other homes like his are selling for around 250-260K. His biggest problems are, even though he has full equity, he cannot pull any money out of the house, he has no money to fix the house, and no proof of income for a new place to live once he sells the house.
My biggest problem- low amount of capital because I am just beginning.
I want to make an offer on the property but it will have to solve both our problems. Here is what I have come up with:
Option 1 80K cash and he can continue to live in the property for a year but his renters will pay me.
Option 2 130 Owner financing - interest only payments for five years with balloon and he will be able to live in the property for a year but his renters pay me.
Option 3 same as above but principal and interest payments will begin immediately, he continues to stay in the home but pays rent for the amount the principal and interest payments are for as long as he wishes to live there. His renters rent will come to me.
Option 4 150 conventional financing but he must leave the property right away so that I can put the property into service.
Please let me know your thoughts about this and how would you write an offer on this property?
Please wish me luck! I'm getting to the first home run deal!!!