I have looked at finding an operator that would be open to carrying the note.A lot of businesses that sell for less than $3mil are based on SDE, Sellers Discretionary Earnings, which is similar to business profit, but you also remove any transactionst that would be related to the owner or one offs.

I was also just talking with one of our people this morning about the fact that there is a big spread right now in what sellers think their properties are worth vs what buyers/investors are willing to pay.

- Challenge is many sellers want to price as: ARV - minus lowball repairs = sales priceSellers rarely have accurate numbers or account for carrying costs and someone's time to organize the work.If you can find an ugly property, with a reasonable seller, you can use an FHA 203(k) mortgage to include the rehab costs in the purchase mortgage.You'll also be better off if you buy a 2-4 family home.

So you can cashflow with traditional financing if you buy at a cheap enough price or if you get some below market financing terms (seller financing fixed at 4-5% and negotiate a balloon payment or IO for a period)If you can't cashflow enough then you need to capture enough equity to be able to flip relatively soon or break even with cashflow.

The seller agent was asking for $75,000 and I made an offer for $55,000.The seller agent accepted.

Hi, I’m under contract on a property in Joshua tree California that we are going to upgrade and list as a high-end STR. the home is currently a mobile home, but we are going to do a 433a registration to have it recognized as a manufactured single-family home.the lender we had lined up all of a sudden stopped offering DSCR loans on rural manufactured homes (they literally stopped offering it THIS week:(The seller is willing to seller finance, but only for two years…does anyone have any suggestions on the best way to go about finding a lender for long-term fixed rate DSCR on a rural manufactured home. 

When It Makes SenseMotivated sellers who don’t want to manage but also don’t want to sell right away.Markets where rents easily exceed owner’s asking lease rate so there’s clear cash flow.You have strong property management systems in place already.My Opinion:Master Lease Agreements can be a smart tool if structured carefully, with clear terms on rent, repairs, and a purchase option.

What is the motivation behind the operating LLC?

We pursue a similar strategy with multifamily (layering bank debt with a seller note in second) but we usually underwrite to bring some equity (10% ish) to close.

The realtor/rep of the "seller" kept providing me a word doc and excel sheet of "financial" data.