Zero Down, Zero Interest Seller Financing - too optimistic?

[John Paul Whaley]

I am currently looking for my first investment property to buy and hold (BRRRR) in DC.

I've found one fairly distressed property that has been on the MLS for a while now, and is labeled "MOTIVATED SELLER". This gets me excited.

I don’t have a ton of capital, but one of the ways I could see myself making this deal work is if I could get the owner to do something like zero down, zero interest seller financing. In theory, if the owner is THAT motivated, he could go for something like this, right?

I realize the owner would have to own the property outright, and that it probably wouldn’t be a full 30 year loan, but is there anything I am overlooking? Is this even possible, or is an offer like this way to ambitious?

In my eyes, I might as well make the offer; the worst they can say is no. Is there a reason I shouldn’t even bother making an offer like that?

[Eric Mayer]

Your expectations are way too high. I see stories on here about 0% down seller financing, but in the real world making offers, I’m not seeing it. I would give them a realistic offer and see what happens.

I’m currently purchasing a quad with these terms from the seller. Full ask $259k purchase price, 15% down, 6% interest, 25 year amortization, 7 year balloon. Fully rented on new 1 year leases at $3,400 a month. 

It’s all negotiable and some sellers will offer better terms than others. Just need a better starting point so they don’t tell you to kick rocks.

Eric