Seller Financing Strategy

[Brad Hornecker]

I have a deal that I'm trying to put together. This is my first lead that's come in on my website! I want to wholesale this condo but we are about 25K off, so I am trying to put together a seller-financing offer that would let me get him what he wants for his property and I would change my plan of wholesaling it to BRRRR using his financing. This would be my first deal, I have been doing research pretty intensely for the past 3 months or so, but I just want to confirm with you much more seasoned folk if this is a good deal.

Our current offer is $330K, I would be assigning this contract to my father for around $336K and he would get hard money to fix up the house. It's not in bad shape, needs new flooring throughout and the kitchen is empty (no cabinets or anything) and it's a condo in a very nice center so the only exterior work needed is some landscaping on the small patio. Max repairs would be $20K for him because he does much of his own work and would probably be done in less than 1 month, and the ARV is $425K.

If I could offer the seller $365K with seller financing at 3% amortized over 30 years and with I'm thinking a 5-8 year balloon, at which point I would refinance and pay off the seller's note, my monthly payment would be about $1540. When I look at this, and also add in the $350/mo HOA dues ($1890), it seems like even with these terms this wouldn't be a good deal because rent would only bring in about $2200, leaving me $310 in cash flow without adding any room for vacancy, cap ex, repairs, etc. Once I refinance these numbers would change, but I'm not sure this would be a good deal without getting a lot more equity in the property.

Does anyone see anything I'm not? Or have any suggestions or ideas? Thanks for reading :)

-Brad