Need Help Structuring Seller Financing Deal

[Adam Meadows]

Hi Folks,

I'm looking to structure my first seller financing deal on a property I'm going to see tomorrow. I know the seller from an open house when his property was listed. It didn't sell, and he reached out to me a few days ago to work out an off-market deal. Here are the details:

Property: 3/1, 912 sqft, 10,000 sqft lot, built 1950's

ARV: $130-140K

Asking: $100K

Repairs: $20K (estimate)

Rent: $1200/mo

The seller owns it free & clear and wants at least $70K down. He hasn't mentioned anything about interest (and I'm not going to bring it up unsolicited). So here's what I'm thinking:

Purchase price: $95K

Downpayment: $70K

Cash flow: $800/mo

COC return: 10%

Terms (Financed amount $25K): 24 mo, 36 mo, longer? Fixed monthly payment ($200-300/mo) with balloon at the end? If he asks for interest, what's a reasonable rate (5%, 7%)?

My strategy is to wholesale this deal to an investor in my network. Thanks in advance!

[Adam Meadows]

@Steve Vaughan point noted, sir... :-)

@Brent Coombs you're exactly right. If I were to wholesale, I'd get it under contract for $70-72K for a $3-5K assignment fee for myself. But to your point, the rehab numbers have to be airtight (with a 10% cushion or more). 

I appreciate the education from both you guys. Clearly there's something to be said for 67 posts vs. 4,000+

Thanks again!