Updated over 8 years ago on .
How to make this seller financing work
OKAY! So, landed myself in an unplanned opportunity...potentially.
Run down, I have a counter offer from a motivated seller for 417K. I am under contract on a different property that I have chosen over this but have not informed the seller that I will be rejecting their counter. So then Robert Kiyosaki appeared on my shoulder and asked, "How can you get both properties?"
Seller's Situation: The son is building an addition to his home to move his mother in. The home the mother currently lives in is a family home and was purchased in 1964. Appears to have no refinances on it so safe to assume she has 100% equity. The son seems pretty motivated to get his mom into his mom as she is very old (90 if I recall correctly) and doesn't seem to be hurting for money.
Seller financing seems to be the perfect strategy for this but I need some help. I'm a newb...
Pros for me: I get a rental property that is 100% move in ready. She cared for this place with absolute love and the condition is immaculate.
Pros for seller: No dealing with banks. Steady income coming in. Will make significantly more than their asking price (425k) in the long run because of interest.
Haven't ran detail numbers yet but I will as soon as I hit post but here's what I'm thinking so far.
Purchase: 350k
Down: 20k
Finance: 330K for 30 years at 6%
Seller would make 712k at the end of the loan. 67% more than their list price!
I can make it cash flow at this price. Would this be a fair offer and how should I go about presenting this? Another problem I see is that he has a listing agent so if he keeps him, he would still have to pay him commission even if he were to seller finance right?