All Forum Posts by: Christopher Phillips

@Account Closed

Depends on interest rates and other stipulations. Otherwise, why not...

@Vadim Mosneguta

4 days is right around the corner. By the time the owner wrangles with legal advice the contract will be expired.

@Ron Mussatto

If you submit an offer waiving the inspection contingency then you lose that "out" if you find problems later on.  And yes, you would lose your earnest money in that case.

If you are getting some form of financing, they will require an inspection. So, this would really be with a cash deal.

@Ron Mussatto

Buyers don’t offer “as-is,” the listing is “as-is” because the owner doesn’t want to fix anything.

A walkthrough with a contractor isn’t the same thing as an inspection. A contractor just tells you how much it will cost to replace things. An inspector is there to report on hidden defects like faulty wiring and bad plumbing.

As a buyer, you can waive the inspection contingency if you plan on doing a total gut of the house. If you don’t, waiving the inspection gives you no recourse if hidden problem show up later, because your contractor isn’t acting as a licensed and insured inspector during their walkthrough, they are there to give your work estimates and nothing more.

@Ben Smithwick

No. Realtors are notoriously cheap. They take crappy photos with their cell phones. Sometimes they don’t bother to get out of the car and take a picture of the house with the car window still rolled up.

Many listings don’t have descriptions. Those that have descriptions are boilerplate copy/paste from previous listings and are certainly not written by a copy writer.

Plus, having a third party non agent writing the copy puts the agent at risk for fair housing violations.

@Stephen McAuliffe

Is it turning a profit? Valuations are usually 3 to 5 times net profits, not based on revenue.

You could, in theory, assign it to someone else, but restaurants are hard to sell. The margins are thin at best...

@Mike Fontaine

Just treat it like any other financing. You'll still want to do an inspection. You might consider getting an appraisal - seller financing usually doesn't require it. So, you either pay for the appraisal or have to be good at doing your own valuation analysis. You don't want to be in a situation where you over pay and can't sell it down the road if you need to.

And don't forget to ask if the seller has other properties they want to sell. People forget to ask that all the time and turns out they have 30 other properties they are slowing winding down.

@Mike Fontaine

It's not super complicated. You just ask if the owner would be willing to do seller financing. You might have to explain it to them. Depends on how much of an investor they might be. Sometimes people fall into rental property through family.

They'll want it if they are looking to spread out their capital gains instead of biting it all at once. So, it can be a win-win situation.

You go through the usual purchase process, except the owner carries the note.

It can get a little complicated if they still have a mortgage. So, you'll want the right situation to avoid due on sale clauses with the previous lender.

Essentially, they'll want some money down (depends on how much cash they need of out the deal). Carry 6% to 8% interest amortized as if it's a 30 year note. Then, they'll want a balloon payment at either 5 year, 10 year, or 15 year+ depending on their personal situation. Gives them some cash flow, gets you into the property, spreads out their capital gains, you get to avoid the lengthy process of getting traditional financing. A lawyer will draw up the promissory note with all the agreed upon particulars. It will be recorded at the county clerk just like any other loan. 

@Kyle Southard

Yes. That is a myth. Listing agent’s fiduciary duty is to their client the seller. Not to give unrepresented buyers a deal.

Seller pays for the commission. It doesn’t serve you to go in without your own representation. Especially considering most buyer agents do all the heavy lifting during the transaction.

@Simon Obas

Is it on the MLS? Distressed? Off market? What's the situation?