Gaithersburg, MD · Member since 2017 · 127 posts · 23 votes
So I've been in real estate for 2 years & I've done 4 wholesale deals.
This is the first time I've come across an owner willing to do a seller financing deal. I've read all about it and listened to podcast on it but now that its an actually possibility I don't know what to do.
Property is in Washington DC, fully paid off.
Comps show an ARV of 750-790.
The owner wants to get $430,000
The basement has its own entrance and can be turned into a separate unit from the upstairs.
I'm not to sure on how I would structure this deal, so any insight would be greatly appreciated.
I would like to fix the property up, rent it out and refinance in 3-6 months so I can buy more rental units.
Rental Property Investor · Washington DC · Member since 2017 · 58 posts · 18 votes
7y
@Trevor S Foster the great thing about seller financing is there is no “one” way to do things. You and the seller negotiate the terms. I’ve seen buyers put down a larger down payment. Me personally I’ve done smaller downpayments.
I would definitely recommend using a title company of course. If you would like we can chat more about this process.
I live in DC as well so meeting up is an option as well.
Investor · Pacific City, OR · Member since 2016 · 174 posts · 123 votes
7y
I've been lucky enough to buy two properties with seller financing. You can just negotiate the terms and not have to use a bank at closing, so your closing costs are a lot less.
Ted Turner said in his book that people thought that he overpaid for things, but he said he was more interested in the terms than the price.
Just run numbers and try to make the deal a win/win for both you and the seller.
Gaithersburg, MD · Member since 2017 · 127 posts · 23 votes
7y
Hey hopefully this is my lucky break, so its a NE property - 3 level row house 4/2 (should be renovated to 4/3.5). Its in good condition, mainly just outdated. I think it would need a new layout to get max arv. There's also a basement with 2 bedrooms and needs to have a full bath added. Possible small kitchen it renting as a unit.
Gaithersburg, MD · Member since 2017 · 127 posts · 23 votes
7y
Thats what I figured, we could negotiate whatever terms we wanted. I also wasnt sure if once I refi, would I have to then pay off the full amount to the seller? or would I be able to negotiate being able to continue the loan for the full 5 years to maximize the money.
I also have a good relationship with home first title but if you know of any other title companies that are well run please let me know. I'll send you a DM to exchange contact info
@Trevor S Foster the great thing about seller financing is there is no “one” way to do things. You and the seller negotiate the terms. I’ve seen buyers put down a larger down payment. Me personally I’ve done smaller downpayments.
I would definitely recommend using a title company of course. If you would like we can chat more about this process.
I live in DC as well so meeting up is an option as well.
Gaithersburg, MD · Member since 2017 · 127 posts · 23 votes
7y
Yeah I figured if I have enough time to actually do the BRRRR with this property and then use the refi money to buy more rental units then the price paid isn't so bad. It would definitely be a win/win because the owner wasn't willing to part ways with the cash offer we gave, that's when he gave the owner finance option.
I've been lucky enough to buy two properties with seller financing. You can just negotiate the terms and not have to use a bank at closing, so your closing costs are a lot less.
Ted Turner said in his book that people thought that he overpaid for things, but he said he was more interested in the terms than the price.
Just run numbers and try to make the deal a win/win for both you and the seller.
Rental Property Investor · Montgomery, AL · Member since 2017 · 277 posts · 221 votes
7y
@Trevor S Foster That is awesome man, sounds like an amazing deal! I recently was able to convince a seller to do owner financing on a 4-plex I purchased and it has been the best deal I have done to date. In my opinion the keys is really seek out the owner's motivate and end goal. For example, is he wanting to do owner financing to save on the capital gains taxes or is he is worried about where to put his money and wants the return a mortgage interest rate would provide? Based on those answers you can structure terms of the deal such as down payment, amortization term, interest rate, etc. Feel free to DM me if you have any questions.
Specialist · San Antonio, TX · Member since 2015 · 909 posts · 297 votes
7y
i agree, unless you feel confident and have the connections to make this deal work absolutely.. then you should wholesale take the quick money as that will help boost you into becoming an investor