Deal Structure for Off Market Deal

[Mathew Hilton]

Hi all,

I'm a relative newbie, I just starting establishing systems to look for off market deals (D4$, cold calling with a dialer, etc). My cold caller identified this lead and I wanted to see if I could come up with a creative finance solution in addition to an all cash offer in order to give the seller options.

Location: Fresno, CA

Built 2010

4bd, 2 bth, 1600 sqft

ARV= $415k

Their current asking price for an all cash offer= $390k 

Their mortgage balance ~120k, interest rate is 4.51%

Roof is original (14 yo), HVAC is new (replaced last year), no other updates or major repairs that he's stating.

Situation:

The husband states his family of 7 has outgrown their current home. They've been trying to buy a new construction home but they've been getting outbid. He also states they don't have enough for the down payment (which he says he needs $230k for the downpayment). I know that down payment doesn't really add up to me because even the 5bd/3bth new constructions are going for ~615k, which even if he was putting 20% down as an owner occupant, that'd be something like $123k for a down payment...

He wants a cash sale of the house to make this seamless. He also would like for the family to be able to rent to stay in their current home for a few months so they can buy then move directly to their next home. He doesn't want to move to temp housing, get storage, etc.

Offers:

Cash as-is: my max allowable offer is $242,700; with this, I'm thinking I can let them rent for 3 months for free to sweeten the deal. They're also avoiding short term rental fees, temporary storage fees.

Creative finance: they have too much equity for a subject-to deal; but I'm wondering if I could do a wraparound mortgage of 300k at 4.51% (payment would be around $1785/mo; market rent is around $2300/mo) and maybe offer like $40k cash?

My exit strategy: for cash as-is offer, I'd like to flip this or wholetail it. For creative finance, I'd keep it as a long term rental.

Any angles that I'm missing? I'm very new to creative finance and I'd appreciate any thoughts! This is probably not much of a hot lead because they're not in real distress and they're likely just unrealistic with what a cash offer will be. I know I have to do some more digging to find really why they don't just want to list this house on the market.

[Mathew Hilton]

@Gustavo Munoz Castro I found my guy on Upwork! His rate is $5/hr. I have to subscribe to a leads site (BatchLeads) and I bought a multidialer and I have him use it.

@Travis Beck yes I agree that going through these reps and steps are helpful just for learning. Yes, come to think of it, I can probably raise my offer assuming that there aren't any other major repairs that I'm unaware of. Yeah, assuming their needed down payment for the next house, I'm thinking they might be stretching themselves a bit to qualify for the next house. I'm not a realtor but I work with one and I'm definitely thinking of referring them to him to sell if this doesn't work out this way. Thank you for your feedback.