Need some advice on structuring offer

[Jeremy Jackson]

Happy holidays BP'ers!

I've found an off market property.

Asking:  $45k

Needed repairs:  $10k

ARV: $75k

Monthly rent:  $900/month

Property taxes:  $483 annually

House is in a good neighborhood, nice lot, good bones, mostly needs updated.

Seller is very motivated.  She is the executor of the estate.  Property was previously owned by her grandfather.  She has a lien against the property for less than $10k.  Her property taxes are due now ($500).  Not listed with an agent

She stated she had a verbal agreement with another guy, but he bailed without notice.  Her previous agreement was:  buyer pays current tax bill (buyers idea, not hers), purchase price of $40k, $10k down cash to seller, contract for deed, remaining balance ($30k) due in Jul 2017.  I asked if she was requiring a payment from buyer Jan-Jul and she stated no.

She originally told me asking was $45k, I asked her what her previous deal was and she spilled the beans so I know she'll go $40k sales price (possibly lower).  She expressed numerous times that's she's "flexible."

I've never done a creative finance deal and would like some idea's.  Any help is appreciated!

[Clay Smith]

For me, a contract for deed is only worth pursuing if one condition is met.

Assuming the property is rentable or will be made so; IF (REPAIRS + DEPOSIT + DOWN PAYMENT) < (BANK REQUIRED DOWN PAYMENT + REPAIRS + CLOSING COSTS) then it is a deal.

What does this look like? Generally the property needs to be in good condition. Typical distressed sellers are because house is rental grade finishes, long DOM on MLS and unable to sell, or tired/unwilling landlord.

Low money down. Generally I want to put down less than I would using a bank. We have a local bank at 10%, everyone else requires 20%. Use whatever figure is relevant to you. So for this house, 8k (20%) at a bank would buy me a 40k house. Add 1k for closing with appraisal costs. 

If it is a non-performing asset, and needs 10.5k like your above scenario it is better as a wholesale or cash purchase. Renovate, make it perform again, and then finance it.

I find very few contract for deed opportunities land in your lap without looking for or recognizing one immediatley.