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Updated about 8 years ago on . Most recent reply

Help with terms on "owner carry" or "owner financing"
I'm about to make an offer on a raw land purchase, which the owner will carry. What would you suggest for terms?
Some context: There is a buyer's agent, and a seller's agent. The owner purchased the property in the early 2000s for ~$200,000 without the help of an agent and then learned a few "prohibitive details" about improvements that would need to be made to the property (cost to run power, drill a well, road work, etc.) They backed off their plan to short plat it into 3 parcels; meanwhile, their kids moved out of the area and suddenly they didn't have a compelling reason to keep/develop the property. They aren't in a hurry to sell, don't need the money, yet want to make as much of their money back as possible. The land has been on the market for 2 years, with no known offers. Asking price= $139,000.
Here's my starting point: $125,000 at 5% interest, 10% down, 20-year note, no balloon payment, and no pre-payment penalties.
I realize that location, market, size of the property, improvements, monthly payment limitations, etc. all play into the offer and that is too much detail for here, so perhaps I could use the most coaching on what principles to follow and whether my starting point seems reasonable, insultingly low, or if I should get more aggressive.
Thoughts? Suggestions? Thanks in advance!
Most Popular Reply

Well.....what is your exit strategy? What do you plan to do with the property once you have acquired it and how will you make a profit?