Found a Great deal, need recommendations for selling!

[Peter Bui]

Hey all, so i have a weird situation for you guys: 

So my coworker owns a property out of state and wants to move to california. He has the property paid off approx. 83% (25/30) not exactly if you account for amortization. But he has 5 years left to pay off. I offered him that I can pay the rest of the 5 years off and then pay him monthly with interest until we reach his desired amount. 

Then I plan on selling it through contract with seller financing with a higher price to another buyer after rehabbing it and adding equity. 

Do you think that this is a good plan or is there a flaw in it? If so, do you recommend any other ways of selling this property? 

And what happens if the buyer can't pay off the house, would I have to foreclose on them? So i guess the question here is, is it risky to sell with seller financing? 

Thanks in advanced!

Peter 

[Account Closed]

Peter,

A lot depends on the property and the price you would have to pay.  If you get a great deal, you would end up with a good amount of equity and are better protected.

If you provide seller financing, your recourse is to foreclose, thus the need for a decent amount of equity.  It is a riskier way to sell, but can often lead to a quicker sale and higher sales price.  Just make sure you are comfortable that even when the economy declines you are still in a comfortable position should you have to take that property back.

Lauren Prichard, CEO

Aborn Powers/Aborn Homes