First Off Market Duplex

[Andrew Parrish]

Hey everyone! This is my first post and it may be long winded to get back story so I apologize in advance. I have been reading and listening to podcasts and reading every day for the past 3 months. I have a question about buying my first property off market. I have a pretty good chunk of change saved up, a job, a veteran, very low debt to income ratio, and a decent credit score. I have been actively searching for deals but I wanted to wait until March to use my VA loan or do an FHA loan. I have been listening to a lot of podcasts and reading and have been learning about subject to and seller financing. A couple days ago I decided I might as well try trying to talk to people about buying their distressed homes so I can gain confidence and get the awkwardness out of the way. In 3 days I have talked to two people and one guy said he would sell his duplex for 225k which would not even be close to being a deal in my area and the second guy agreed to have a conversation to see if I can help him. He seems like he is very confused and conflicted about the property because in the past he has put up signs and then taken them down the next day. I talked to him outside of the store and we exchanged info on the property. The conversation pretty much summed up is he said he owns the property, gets a lot of mailers and that he doesnt want to sell using a real estate agent. I told him we could figure something out that would workout for both of us and that only if he felt comfortable. He seemed pretty willing to work with me so far. So here is the problem. I have wanted this shot at this duplex since I started listening to bp podcasts because it fits my criteria perfect. It does need some serious work but I know this property will be a great investment opportunity. This property will not qualify for traditional funding and he does own it. I am thinking a reverse mortgage would be perfect because I would have no problem qualifying for a mortgage on the property fixed up. My question is if he agreed to something like seller financing where If I gave him 10k and agreed to lets say 750 a month for the next x amount of years. How do I get the title so I can do the reverse mortgage and cash out to pay for my remodel and get a down payment for the next property? Like can I do the BRRR method while I still owe him money? I know it sounds confusing but I dont know how to word it to look it up. Any opinions, thread referrals, pm welcomed. Thank you in advance!

[Grant Thompson]

Andrew,

When you use seller financing you still end up owning the property (taking title) and the seller will own the note which you agree to pay by the set terms. This is definitely a viable strategy, close on the property with seller financing, rehab it, and then cash out refinance to pay off the seller financing note. If you need money for the rehab work this can be a little tricky. Some lenders will pay for a portion or all of the rehab, but I doubt this is possible with seller financing so you may have to get creative.