Seller Financed wholesale deal need advice!

[Dante Williams]

Im back at it again! After multiple attempts I think I found my niche. Here is the deal. Owner wants $22k. property needs 80-100k in repairs ARV 140k. The numbers dont work for a cash deal but here is how I negotiated. 11.5k at close this gives the buyer back what he paid and allows him to pay half of the back taxes. 10.5k in installments of $300 a month for 35 months zero interest and no payment for 45 business days(62 calendar). Property is a 2 flat total of 5 beds 2 baths, but has a unfinshed garden apartment below grade. after rehab rental income would be $2200 if garden unit is converted. total debt service is $900. annual rent of $26,400 -debt service $10,800=$15,600. After subtracting operating expenses then calculating cash investment of end buyer. The cash on Cash return for the first year is 63%! What do you guys think? Is there anything I should watch out for or pay close attention to? This is my first seller financed deal.

[Jon Holdman]

You say its a wholesale deal, but then you go on to describe a upfront payment, payments to the seller, payments to a bank, rehab, holding costs, return from rents, etc. I don't blame BIll for thinking this was buy and hold. Sounds like buy and hold to me.

If this is a wholesale deal, none of this matters, other than as possible information for the buyer. But the buyer may be able to do the deal for cash or have hard money or some other kind of funding.

If this is purely a wholesale deal, what's your question? You just offer this to your sellers for $22K plus your fee. Seller financing might help a little, but with a $22K (maybe $25K with your fee) and $100K in repairs, seller financing is not that big of a deal. Frankly, $125K (buy plus rehab) vs. a $140K ARV isn't a particularly attractive deal, even if the cash flow numbers work.