Creative Financing Question

[Jamie H.]

I am early in my REI journey, doing a lot of listening and learning, but haven't yet put together a deal. I have a SF rental home which I used to live in; next door to it is a property with a very small (650 sq ft/1 bedroom and 1 bath) house and a large open yard. The yard is on the side of the property against my house's property line, therefore, the light and open space for the entire side of my house is possible because of that open space. I have always looked across that fence-line and longed to own the property next door as well (apparently the story goes that the owners of my house built the little house next door for their daughter, then sold off the land/house at some point along the way) so that I could control any possible design/build on the next door property in a way that would maintain value for both properties. If a builder buys who doesn't care about this, they will probably go right up to the fence-line really limiting light and changing the entire feel of my property.

So, here's the kicker - the little property next door was just listed for sale with a review date of Tuesday. I do not have enough cash to make an all cash offer, and don't believe that we would qualify for traditional financing (though will look into whether we might if we apply in my husband's name alone). Either way, Tuesday is soon and I'm not sure a traditional offer will come together quickly enough. I'd love ideas of how I might approach this (I do have the seller's contact info but when I reached out to just let him know that I was interested without any additional details, he sent me directly to his agent)...

I'm open to all opinions about the situation, how to assess whether this is worth doing, and if so, how you might approach financing.

[Albert Bui]

HI Jamie,

If you really want the the property then you're considering ways to improve your chances with out giving away the farm I assume? Usually your real estate agent who scope out the type of seller and listing agent is representing this listing and will devise a strategy for you to make an offer on this little house that will appeal the goals of that seller.

Some ideas might be:

- short or no inspection contingencies upon your first offer

- limited/short contingenies or no contingencies for appraisal

- shortened financing contingency period to appeal to seller

- perhaps seller is older and needs time to move out, then a lease back allowing the seller up to 60 days to move out might help

- offering higher EMD or earnest money deposit or partialy hard deposit day 1 like 10,000 EMD with 2500 hard day 1 (hard meaning non refundable day 1)

- obviously there is going in with a higher price as swell

- use of escalation clauses are popular in the pacific northwest west and alot of agents who are in areas with out escalation clauses dont use these often but basically you agree to page a preset amount above the next highest offer till you win up to XXX,XXX price. An Example would be 1000 above the highest offer up to 750,000.

Hope that helps, let me know if you'd like to coordinate these strategies with your agent.

Sometimes you dont need to do all of the above.

You can pick and chose your strategies to cater to the specific sellers tastes.