Not too scary, except that it is the first seller that has agreed to discuss seller financing and I have made ZERO deals in my life, and my numbers are quite possibly horribly wrong, and it is blasted HALLOWEEN!

Ok, skinny on the home:

Vacant 1940s craftsman two story 2/2 in an UBER family-saturated (literally two blocks from on of the nicest middle schools in town) neighborhood that pulls ft per square footage numbers down from the heavens.

In need of major renovation:

-Kitchen (all but possibly cabinets to be replaced)

-Needs HVAC installed

-Lower level bathroom needs to be completely redone

-Majority of floors in remainder of house are good solid wood, just need refinishing

-Need to add a closet to an upstairs room to make it a 3/2

-Great deck outside has retreating and slitted boards from water standing on fallen leaves over the years

-Old one car garage most likely needs tear down

-Basic landscaping and fencing

This property is listed in the MLS and has 100 DOM, dropping from 190k to 172k. On the high end, these houses sell for 400k within these blocks. On the low end, low 200s, Given the style, amenities, and presumed upgrade to 3/2, I expect a worst case ARV of 250k.

My plan:

- Seller would sell the home at a purchase price of $130,000 with no money down. I would pay my closing costs (I am a licensed agent, so would expect 3% back from the sale as well)

- Seller would offer an interest only purchase money mortgage of $130,000 to myself at a fixed interest rate of 6% for a term of 6 years.

$130,000

x 0.06

=$7,800 interest annually

$7,800

x 6 years

=$46,800 interest over the term

$46,800

+ $130,000 loan balance

=$176,800 total compensation (higher than the asking price)

- This would allow me to have a low monthly interest payment of $640, which would free up my funds for the rehabilitation process, and it would allow Mr Lewis to obtain more than his listing price in the course of six years. In the case that I default on my payments as we set up in our agreement, he would have the opportunity to foreclose on me and re-obtain the property.

- I would also obtain a loan for rehab (ballparking 50k but have not walked through with a contractor), which has not even entered the picture yet.

- I expect the home to rent for 1400-1500

This is where I am at the moment and am trying to get a meeting with the seller and his agent.

Thoughts? Oh-no-don't-do-its? Better options?

Thanks guys

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