Structure advise for seller financed wholesale deal
Hey everybody,
Here's what's going on: I have a motivated seller who has agreed to seller finance a duplex they own (not owner occupied). Terms of financing are:
Purchase Price: $31,500
Down Payment: $1,575
Monthly Interest Only payments of $149.63 for 36 months
Balloon of $29,925 due in 3 years
(Side note: is a good deal for a buyer? Rents are $450 and $475, I think market would support $500. Tenant pays all utilities except water/sewer/trash which is about $70/mo for both. Needs about 8k in exterior repairs. ARV about 40-45k)
BUT the seller has a mortgage balance of 36k
Bought it 11 years ago for 48k
Interest rate on the note is about 7%
Since the purchase price is less than the mtg amount what is the best way to structure the financing for the buyer? Since I'm going to take a wholesale fee conventional is out right? Is subject to still an option? Land contract?
What would you do??