Need Seller Financing Help

[Christopher Vargas]

Hello BP, I have a deal about to go under contract, but hard money lenders will not loan the full amount required for the rehab & flip project.

The seller has an outstanding mortgage of $53k. I can borrow that amount using hard money with no problems. But if I do, that leaves $57k on the table that needs to be paid to the seller.

(Note: lenders are offering a loan amount no greater than $90k with 3 points and 13%. I only have $20k in cash reserves and a purchase price of $110k. If my numbers are correct, the total cash in the project would be $120-125k. I need $100k from a lender at the bare minimum. This is why this deal would not work for lenders.)

The property needs less than $10k worth of work, and can be flipped for a reasonable sales price within 3 months for $150 at the minimum.

How can I present this to the seller that would be beneficial to both of us? Are there any specific contracts that I could find here on BP?

If she agrees to seller financing for the remaining balance, WHAT NEXT?

[Rob Jones]

@Christopher Vargas,

Here's scenario.  Get the hard money loan for $53k to pay off the current owners mortgage and create an agreement to pay the remaining balance($57k) plus an agreed upon interest percentage to the original seller once you sell post-rehab.  This will allow you to pay the $10k for the rehab out of your owner pocket.  Upon selling the property post-flip, you can pay the original owner the $57k plus interest(or you could split the profit with them).  I would see this as a win-win for both the original seller and yourself since you would be making some money on the $10k you invested and the original seller would be getting more than their asking price.

Not sure if that would work but it might...you never know until you ask!