Off-Market deal - What creative finance way can I use?

[Roberto Falck]

Hi,

I have an opportunity on an Off-market deal, but I am not sure how to approach it and am reaching out here to see if I can get any advice.

Here are the facts:

Owner is retired and recently moved to assisted living and is ready to sell the house. I am close to the owner so I can discuss options.

These are details and some rough numbers:

• - Location: Vienna , VA
• - No mortgage on house (free and clear)
• - Purchased year: Around 1980
• - Purchased price: around $50,000
• - Type: 3 bed - 2 1/2 bath single family
• - Market price: $920K (not appraised yet but numbers from Zillow)
• - Market rent : $3,400/mo (from BP Rent estimator)
• - Insurance $2,000 /yr
• - Taxes $9,300 /yr
• - Management $3,260/yr (I do not want to manage )
• - Repairs: TBD

The numbers do not work with conventional financing (20% down, 7% interest, 30 yr) so I want to think of creative financing ways.

Owner financed scenario:

Here is what I thought off:

• - pay market price ($920k)
• - Interest: 2-3% year
• - Down payment: 0-$30,000
• - Paying interest only for the first 15 years
• - Balloon payment at year 15 (or refinance then)

The numbers don’t seem to work either. There is negative cash flow… my thoughts are that either:

• - Rent estimate is way off
• - Property value is too high
• - Other?

Note: I know owner will have to pay capital gain tax, etc. so I want to put a proposal together that can compare selling on the market vs. selling it to me and how advantageous it would be, but I can’t find the right numbers for it to work yet.

- How do I make this work? What am I not seeing?

- What other strategy can I use/propose?

- If I cannot make it work as a LTR for myself could I be able to wholesale this? (What kind of investor would be interested in this?)

I appreciate any comments and recommendations.

Thanks!