Ideas on how to finance a deal with an older seller?

[Sam Amir]

Hi BP,

My partner and I are talking to an older gentlemen (in his 70's) about selling his property. He's motivated to sell because his wife and kids are in a different country and he's looking to move closer to them. I checked property records and he owns the property outright as of last year. I was wondering if anyone had any creative financing strategies when dealing with older owners? 

Seller financing is an option, but if I was as old as he is...and to be blunt...I'd want as much cash as possible because I might croak soon! He was also a little hesitant on the idea of seller financing when we mentioned it.

Any ideas would be much appreciated.

Details on the deal:

-Would be a package deal, 1 3-flat and 1 SFH. Both properties are next door to each other.

-Phenomenal location

-We have about 10%-15% of purchase price in cash

-Condition of the property is well-kept, owner has a sense of pride. Would not need much rehab, just some light TLC

-He's a damn good negotiator (I can tell!)

Thanks,

Sam

[Kerry Baird]

I came across a similar situation, when driving areas with my business partner. We saw a guy putting in a FSBO sign in a yard. We stop and ask what he wants for the property, and it was a reasonable price. We ask if he would carry, and he said No. My partner asks, "If you *were* to carry the note, what interest rate would you want?" and he said immediately, "Six percent." We called a traveling notary and had the deal locked up in an hour.

Not everyone is motivated by the same things.  While you assume he'd want his money because he is old, he may actually want to avoid the tax hit on capital gains.  Receiving his money over time can be a benefit.  It gives him a stream of income, rather than a lump sum that he's got to figure out what to do with.  Don't assume; ask.