I want to make 2 offers - Cash & Seller Finance

3 Replies

ARV is $115k-$130k

Rent in current condition is about $850 / mo. plus utilities

Taxes $200/mo and estimate insurance at $60 / mo. 

Property is 2BR ranch on street with many small ranches.  Nice area and well maintained property.  Property needs new kitchen flooring, H/w refinishing or carpet, some minor plumbing work, updated light fixtures, new flooring in bathroom, removal of wall paper in dining room, paint, new vanity in bathroom, new countertops, and new stove.  Maybe I could paint the existing old looking cabinets, or could get new ones.  It's in pretty good condition for the area.

I've never done a flip on my own, only wholesale deals or flips with other investors who supplied all the funds.  

I would estimate property is currently worth $80-90k if placed on the MLS.

I was thinking offer $55,000 cash as a wholesale deal on an assignment, or $70,000 with seller financing with 4% interest.  

I probably would have about $10,000 to fix up this property if I did the seller financing.  Any advise, specifically with regard to the seller financing?  My plan would be to do the flooring and get a new stove and put a tenant in there for $850+ per month.  I would be willing to keep this as a long term holding.  Let me know what you think.  Thanks.

Originally posted by @Sam S. :

ARV is $115k-$130k


Hi Sam, I see there are no responses to this... what did you end up doing?

Well for one you did not mention if the house is owned free and clear. I can only assume so because you are considering owner financing. Whether the numbers would work or not depends on the number of years you could finance it for with owner financing. If you did a 30 year mortgage they would work I think but not if you did a 10 year note. If it only needs $10,000.00 worth of work and you wanted to make sure you could wholesale it fast I would even consider fixing everything and offering it at a good price to a cash buyer to assure of a quick sale. You would not be tying up your money for long I think. But that is just my idea no necessarily something you would want to do. You might even consider an interest only loan with owner financing if what would be possible. 

Only you would know the owner since you have been in contact with them I presume. This could turn out to be a good deal or one that would not work depending on how you structure it. Make sure you always account for PITI, maintenance etc.

Here is a cash or terms form to fill out with most SFR sellers

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PROPERTY INFORMATION WORKSHEET

Address __________________________________________ Date _________

Location / Cross Street _______________________________ Map Pg# _____

Seller _______________________ Ph# ____________ Alt. Ph# ___________

Listing Agent _________________ Ph# ____________ Alt. Ph# ___________

CONDITION

__Occupied / __Vacant _____ Bed/_____ Bath Construction _____________

A/C ___________ Elect. Amps ________ Garage _____ Year Built _______

Roof ____________________________________________________________

Exterior __________________________________________________________

Interior __________________________________________________________

Kitchen __________________________________________________________

Baths ___________________________________________________________

Plumbing ________________________________________________________

Appliances _______________________________________________________

Neighborhood ____________________________________________________

Other Work Needed ________________________________________________

________________________________________________________________

FINANCIALS

1st Lien Bal. $_________ 2nd lien Bal. $_________ In Foreclosure: __Yes/__No

Asking Price $_________ My Offer $_________ Resell Approx. $__________

Terms: __ Subject To, __ Agr. For Deed, __ Seller Fin., __ Lease Option, __ All Cash

Additional Notes __________________________________________________

________________________________________________________________

________________________________________________________________

CONTACT RECORD

Name Date Note

_________________________ _____________ ____________________

_________________________ _____________ ____________________

_________________________ _____________ ____________________

_________________________ _____________ ____________________

_________________________ _____________ ____________________

_________________________ _____________ ____________________

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