Skip to content
×
Try PRO Free Today!
BiggerPockets Pro offers you a comprehensive suite of tools and resources
Market and Deal Finder Tools
Deal Analysis Calculators
Property Management Software
Exclusive discounts to Home Depot, RentRedi, and more
$0
7 days free
$828/yr or $69/mo when billed monthly.
$390/yr or $32.5/mo when billed annually.
7 days free. Cancel anytime.
Already a Pro Member? Sign in here

Join Over 3 Million Real Estate Investors

Create a free BiggerPockets account to comment, participate, and connect with over 3 million real estate investors.
Use your real name
By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.
The community here is like my own little personal real estate army that I can depend upon to help me through ANY problems I come across.
Buying & Selling Real Estate
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

Updated about 10 years ago on . Most recent reply

User Stats

35
Posts
10
Votes
Scott Stevenson
  • Real Estate Agent
  • Ferndale, MI
10
Votes |
35
Posts

Question about a Seller-financed deal

Scott Stevenson
  • Real Estate Agent
  • Ferndale, MI
Posted

Hello everyone, 

There is a package of 16 Single Family Homes in a nearby area that is up for sale. I have emailed the agent associated with the package asking her if seller-financing is an available option in which she replied yes. 

I most likely will not be going through with this deal because I am very new to the real estate world and would not want to jump into something too quickly. 

Basically I just wanted to post this here and gain some additional knowledge about seller-financed deals. I would like to know how you guys went about structuring such a deal, as I have read that it is wide open in terms of the repayment plan, interest, down payment, etc. 

At first glance this package seems like a fairly good deal. I'll post the numbers.

16 properties for ~$725k list price

Currently they are all 100% occupied bringing in $11,500 per month. 

Taxes are roughly $20k per year and insurance is another $5k.

There is management company attached to that which receives 10% of the rents so $1150 each month. 

At 100% occupancy these properties should bring in close to $8000 a month after taxes, insurance, and management fees. 

As I am new to this, I am wondering what else should I be looking out for? I would imagine maintenance costs could add up with having 16 homes.. but besides that? 

I am also curious how you would go about structuring this deal using seller-financing? 

If I was going to go after this deal, I would try to keep the down payment as close to 0% as I could and maybe stay more toward the list price as a compromise. I was thinking payments around 5k per month, that way I could still make the payments even if I dropped to 75% occupancy, for a total of 6-7 years and then have a balloon payment on the back-end I suppose. 

Just trying to gain some advice, as this is pretty much a hypothetical situation for me. 

Thanks! 

Loading replies...