Seller Financed Property Under Contract With Bad Tenant In Place

[Andrew Domnauer]

Hello,

I am a new investor and currently own two single family rental properties.

I have a third property under contract that is seller financed.

We were under contract and a few weeks from closing the seller notified me that he had leased the property to a tenant for $500 per month for 5 years. The seller did not notify me that he was leasing it out, and he did not notify the tenant that I am purchasing the property. The rent is much lower than I was anticipating, and 5 years is a longer lease than I had in mind.

We have been able to negotiate the interest rate down to 4% (was originally 6%), but the property won't cash flow with the current rent rate. The seller does not seem willing to go lower than 4%, and the tenant refuses to leave or pay an increased rent. We pushed closing to on or before June 3rd (about 4 months from now) until we can reach an agreement.

Below are the current terms of the offer:

Purchase Price $82,000

Seller paid closing costs $2,000

Earnest money $100

Seller financing amount $77,000

Interest Rate 4%

Term 360 months

I am prepared to walk away if we can't reach an agreement that makes sense for both of us, but I feel like we are close and I might be missing something.

Does anyone have any suggestions on how we can still make this deal work?

Thank you in advance,

Andrew Domnauer

[Jane S.]

TERMINATE TERMINATE TERMINATE seller did you a nasty