Seller advertised seller financing then changed their mind.

[Chad Zaback]

I'm a little frustrated at this last deal I've been working on. I'm working with an experienced broker that specializes in finding SF houses for investors who buy/fix/sell them. Over lunch one day I shared my vision of buying Multi family and apartment buildings that are seller financed and using private money from some investors I know,  that are looking for a better return on their dollars, to cover the down payment, closing costs and repairs/improvement.

This peaked his interest in expanding his search criteria outside of what he specializes in and within a day he had a sweet triplex within a few miles of my office/shop. So far so good!

I found it hard to get him to offer the package I put together and after some compromise and adjustment we agreed on an offer that we thought would be resonable. 

List price: 219,000

Our offer: 190,000

5% down 9,500

Contract for deed 30 years at 6% 7 year balloon.

Seller owns the building and it has no mortgage or loans.

Sellers realtor wouldn't verbally present the  offer to his seller to start negotiating and when we sent them a fully detailed purchase agreement the reply that came back was.

"The seller no longer wishes to do a contract for deed" "cash out only"

Not sure if the seller really ever even heard the offer and I think his good ole boy Realitor didn't want to spend time on this.

Combined Rents are: $2000

2/1 is 950

2/1 is 600

1/1 is 450

Owner pays all utilities ( no separate meters) Bad veriable for cash flow in the winter here in Minnesota... and the summer too) 

Comments? Feed back? 

[Jeff Kehl]

Without seeing all of the numbers, it's hard to say, but $2000 rent for $190k with the owner paying all utilities does not sound very good to me. That's not a deal I would even bother pursuing any further. But your market might be a lot different than mine or maybe you've already run the numbers and it pencils out ok.

Just to address the offer itself though, it sounds like to me the seller is looking for a big check for some reason. Some sellers are fine with getting an income stream because it's easier on their taxes, better return than they can get in the bank and they just need a monthly check to supplement their income.

But maybe this seller has their eye on a retirement home on a lake somewhere and needs a large chunk of money for that. So why not restructure the deal with 75% financing from a local bank, 20% note from the seller and a 5% downpayment from you and give them what they want?

Again I'd be surprised if that had positive cashflow so check your numbers carefully but that's a solution if you really want this property.