Meeting with seller tomorrow
Hello all,
Here is the situation. Did a yellow letter campaign to about 400 people. Got 3 calls so far. This home is for me to live in, not flip or rehab and resale.
Guy is over 65, has plenty equity, house is worth about $500K the way it sits with no improvements. That may be a little off as it's a 3/1, where the 3/2 homes in the area are going for over $600K in some cases. 3/1 I saw only sold for $440K. I am only approved for about $415K conventionally, but I don't want to go that route if possible.
His situation is he is semi motivated, wants to build a new home 2 hours from his current property, where he has land and it will cost no more than $300K.
I'm needing advice on ways to structure a deal.
I'm thinking...
1) Give him some cash, and ask him to carry the rest. If his new home will take 6-8 months to build, he will need a place to stay in the interim and I can offer to take care of that as incentive to get him to move quicker.
2) He has taken out a $75K and $50K loan on the home already in the last 7 years. He bought in 1988 so it is almost paid off I'm sure. So sub2 is out of the question.
3) The ARV of this home is probably around $600K in this zip code, as its the most desirable in the city. Of course repairs are needed. If i could get him to agree to $450K, that is 75% ARV (but not minus repairs, which are cosmetic). Would a private lender fund this deal?
Do I go there with contracts ready just in case he is game to be moved into an apartment until his home is built?
Any advice is appreciated!