All Forum Posts by: Mark Spelman

Joe - thanks for your comment. I did not think of this, and it is a great idea. I'll run the numbers with this structure and see how it pencils out. In your experience, are interest rates under this structure higher, lower, or the same as my above described scenario? 

Hey BP Friends,

I’ve dug up several seller-finance deals lately in an effort to acquire more properties for less money down than your typical 20-25%. The last two opportunities I’ve had, sellers are willing to finance 90-95% of the deal at an interest rate of 4-6%. The idea here is to get the seller closer to the price they want so that I can get the terms that I want. The problem is, this becomes increasingly more difficult to find a property that cash flows under this structure.

Has anyone else run into this same conundrum? How have you circumvented or solved this issue? Are there any creative “tweaks” to this type of structure that I am not thinking about that could increase the cash flow?

Thanks in advance!

Hi Guillermo, 

As Chari said, several factors will determine whether or not this is a good deal. First, everyone's definition of a "good deal" can vary. What is your goal? Appreciation? Cash flow? Both? What is your criteria (1 or 2% rule, % cash on cash return, etc.)? With any deal, you need to be sure you are doing your due diligence. Don't take someone else's rehab estimate and assume it to be accurate. 
Also do your homework on the neighborhood. The cash flow on paper can seem great, but it is just hypothetical. If the property is in a rough area, be prepared for the potential for more problems. If you can share the neighborhood that this deal is in, other Milwaukee investors will be able to weigh in a bit more heavily. Hope this helps. PM me if you'd like to discuss further. I'm an investor/agent in the area.