What is the difference between a Cash Offer and a Novation Offer?
I have a property I’m looking at in Missouri that’s about 1,400sqft, and not sure the difference between a Cash and a Novation offer.
Cash Offer
ARV $180,000 - $55,000(Rehab) - $14,400 (8% fees, CC, HC) - $40,000 (profit) = $70,600 MAO
Novation
ARV 180,000 x .95 =171,000 (EST. Sale Price
$171,000 - $55,000 (Rehab) - $13,680 (8% fees) - $40,000 (profit) = $62,320 MAO
From talking to other investors and doing research, typically a Novation allow more money to the seller, correct?
Could someone let me know if this is accurate or not? And if not, what am I doing wrong?
Thank you everyone!