Owner Financed Flip
I found a potential flip property by Driving for Dollars in a small Maine town. Tracked down the owner, looked at the property and determined it really could work well -- all comes down to price or in this case terms:
The property has an ARV of $140,000 with rehab ~$30
so 140 x .75 - 30 = max offer of $75,000 the owner won't move off of his number of $88K
Not really a deal I want at that number but he is willing to wait for his money until I sell (with a 6 month fence). Still not sure I can get to the 88 but what advice would there be about this?
If I could keep the house in his name until resold I would avoid initial closing cost / transfer tax etc. Having him carry the house I would eliminate private money fees for that portion...would then put my own cash into the rehab but still need to account for cost of money.
Aside from the decision about profitability I am concerned about the risk of piling my funds into rehab and then the guy won't close the end deal @ ARV...or in some way hold me hostage for more money later.
I am sure this is done every day but looking for input on how to mitigate the perceived risk...my other options are to a) walk away or b) just make him a take it or leave it option at or around the 75k
Appreciate thoughts -- thanks in advance!
b