Updated almost 10 years ago on . Most recent reply
Help Structuring a Seller Financing Wholesale deal
I'm a wholesaler and I have a potential deal that would be my first possible creative financing opportunity.
Details:
Owner has a vacant SFR that was formerly a rental of his in Baltimore county. It's in a nice homeowner neighborhood, on a nice lot. It's the smallest on the block being a 2/1 though. I've been talking with this owner from time to time over the last 3 months, just doing follow up calls since he responded to a DM campaign I did.
ARV ~ 140-150K, he thinks it's worth 170K, but that figure is only applies to the larger & more updated SFRs in the community.
We estimated about 30K in repairs (I haven't seen the property yet). He thinks it only needs an updated kitchen, bathroom, paint, & possibly carpet.
He "says" he wants 115K, which he feels should give me enough spread to make a profit when "I fix & flip it". I really need to get it between 80-90K.
Like I said I've only been talking to him over the phone & he said that "if he was to sell it, he would sell it to me". He's not in hurry, thus not motivated, so I threw out the option of seller financing & his ears perked up. I'm still trying to nail down a time to meet and see the inside of the house.
So this is what I know I "think" I should do:
1)Possibly agree to a purchase price of 115K over as long a period as possible
2)Get an interest rate as low as possible, preferably 0%.
3)It was formerly rented for about $1000 a month, so I don't know if I should set the monthly payments to that or try to get them as low as possible ($500) so I can have a long contract period
4)Maybe offer a down payment & if so how much?
Once I work out the financing details, where do I add my assignment fee in? Do I add it, into the total of the down payment or just tell my buyer my assignment fee?
