The house next door to mine is for sale. The previous occupant was a good friend of mine, so I've been in the house many times. It was in good shape but outdated. After he vacated, his landlord sold it, and the new owner flipped it.
I ran the numbers, and it's a solid deal. My vacancy rate in my primary has been 0% for the past two years.
I think getting this deal is a long shot. I don't have much to put down, so I'm looking for owner-financing. I know most flippers want their money back ASAP. But the worst thing that could happen is a rejection, and I would have the experience of making an offer under my belt, which I consider to be a huge win. The price has been lowered $5k, and it's pushing mid-September. My live-in tenants and I have not seen a single car at that house since the for-sale sign went up. The seller may be motivated to make a deal.
I just don't know how to approach the owner, how to put together an offer, what it even means to put together an offer, or how to present it to him. Any advice? TIA!
You can search for a LOI (Letter of intent) template that is used in your market. It shouldn't be too difficult to find online. BiggerPockets also has a "Tools" tab above, hover your cursor over it and click "FilePlace"... here they have templates and documents that you might be able to search through and find what you're looking for.
Once you have the LOI (otherwise known as an offer binder, offer sheet, deal sheet, etc), all you have to do is outline the terms of your offer:
Proposed purchase price; deposit amount; total down payment; method of payment (cash, mortgage); contingencies (inspection, appraisal, etc); proposed contract date; proposed closing date and anything else outlined on the form or anything else you'd like to include.
If you're going to finance the deal, send a pre-approval letter or something similar along with your offer. Some sellers may also ask for proof of funds to make sure you have the down payment and closing costs in your account.
This is how you can do it yourself... if you'd like someone to help facilitate this offer for you, I'd reach out to a local real estate agent.
Please feel free to reach out.. I'd be happy to connect you with a local agent from my network if needed.
Best of luck on grabbing this deal!
@Abel Curiel I contacted a fellow investor, and he suggested I follow the 3-offer strategy: a cash offer well below asking/market, traditional financing slightly below asking/market, and owner financing at asking/market (or something along those lines). I can't find any info on that strategy on BP; is this something you're familiar with?
I do think I'll need help from an agent. Even if I don't do this deal, I am working with a lender to refi my primary residence so I can get my FHA back and do a 203k on a duplex, so I'm going to need an agent soon.
I will be occupying the duplex as FHA requires, but without the 203k, I have to put 15% down and come up with the repair funds myself. With a 203k loan, I only need 3.5% down, and the repair funds are included in the mortgage. I can use the equity I create to fund my next deal. I've only been in my primary home for 2 years at 3.5% down, so it has maybe 5% in equity in it.