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Updated almost 4 years ago on . Most recent reply

User Stats

73
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14
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Joseph Grullon
  • Flipper/Rehabber
  • Miami, FL
14
Votes |
73
Posts

Creative financing structure for this deal

Joseph Grullon
  • Flipper/Rehabber
  • Miami, FL
Posted

Hey BP, I spoke to a seller yesterday. He is interested in selling his property as he is retired and would just like to cash out on this rental he’s had for years. He stated none of his children want the property, therefore he would like to just sell it. Here’s the caveat, he took a personal loan against the home for $105,000. He would like $340,000 for the property, local comps value the property at around $400,000. He said he would be a little negotiable, in order to get the deal done but not much.

According to him he would have to pay a pre-payment penalty if he paid off that loan now. Otherwise he said he would be willing to wait the 14 months, in order to not be charged the pre-payment penalty.

Does anyone have any tips or advice on a potential subject to structure for this deal. Something where I could offer to acquire his property now for some sort of agreement and then a balloon payment in let’s say two years.

Thank you guys as always,

Joe

Most Popular Reply

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2,871
Posts
2,501
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Rick Pozos
  • Wholesaler, Rehabber and Landlord
  • San Antonio, TX
2,501
Votes |
2,871
Posts
Rick Pozos
  • Wholesaler, Rehabber and Landlord
  • San Antonio, TX
Replied

Buy the property sub-to for the 105k and a 2nd for the 235k. Pay his payment on the 105k and give him a payment of 235k divided by 120 payments(0 interest loan). Or you can add a balloon after 1 year, 2 years or 5 years.

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