Seller Financing Deal 2 mortgages How To Write Wholesale Deal

[Michael Williams]

The seller is open to creative financing. He has two mortgages on this house that total $103k, he wants to pocket $16 after the deal. I had my realtor run an analysis and the ARV is $182k. He's had the mortgage for 15 years. The first 10 years he paid Interest Only. The next 5 he paid principle and interest. The 2 payments together are $1,200 per month.

My eyeball estimate is $25-$30k repairs.

The first mortgage is $20,119.23

Maturity Date – 02/2021

Interest Rate – 9.625%

The second Mortgage is $83,287.30

Maturity Date – 02/2036

Interest Rate – (until 03/2020) 4.5%

Work:

The bathrooms need to be upgraded and painted. Carpet needs to be removed from 3 rooms and on stairs to the second level. New flooring in living room, Upgrade on the kitchen will include new appliances, upgrade countertops, paint, and floor tiles. There's a Laundry room a master suite with a walk-in closet. There is a kitchen upstairs and stair asset to the upper level from the driveway. Possible inlaw suite or rental.  The entire house needs paint inside and out plus landscaping. Plumbing and roof in good condition. Two HVAC units.

My eyeball estimate is $25-$30k repairs. This is a wholesale deal. 

Need suggestions of how to write this up for an investor? As an investor that wants to buy this deal how would YOU approach this? Example: Pay the seller his $16k, pay off the 1st

and second mortgages to refinance, rehab it with 30K, pay a lower rate and interest after refi while you cashflow with a $1500 month renter?

How would you do it? 

Recap: 

Mortgage 1st and 2nd mortgage totaling $103k with Chase

Owner wants to pocket $16k

Estimated $25-30k rehab

Seller open to Owner finance and other strategies

My wholesale fee $10k

Realtor estimate: ARV $182K

B neighborhood

Vintages homes

1 mile from Cooper-Young District in Memphis

1 mile from University Of Memphis and the Liberty Bowl Football Stadium

2 miles from downtown Memphis and FedEx Forum