Options to Make this Deal Work?

[Devin Wanzor]

I am targeting single family houses in a new entry level neighborhood near where I live. The neighborhood still has ongoing construction. Buying new from the builder, the homes are selling for $147k to about $165k.

I have my eye on 2 existing homes in this neighborhood. Both are currently listed FSBO. Both homes are exactly the same floor plan. Both homes were originally purchased about 2-3 years ago for $149k and cost to build this floor plan new right now is about $152k to $154k.

Both of the owners are asking in the mid $140's. They realize they are competing with new construction and also the target market is first time homebuyers. Both sellers assume they will have to pay some closing costs for a buyer in order to sell their homes. Both sellers owe exactly $139k on their homes.

It is eery how similar the two deals are.

So here is the issue:

Neither homeowner is in any kind of financial hardship so a short sale is not on the table. Both homeowners have already communicated to me that they will take an option that has them walking away with no funds out of pocket.

The only option I really see is to offer a contract at their payoff amount ($139k) and also pay all of the sellers closing costs (no realtor involved to seller costs will be minimal).

The problem is that my target buy price for this neighborhood is really in the $133k range and below.

The homeowners want to sell and I'd like to buy, however their current mortgage amounts and lack of financial hardship seem to be a roadblock to me.

Does anyone see any way to help these people sell and help me get a little bit better price?

I plan to either hold these long term as rentals or potentially do lease option deals to aspiring first time home buyers.

Thanks.