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Updated over 10 years ago on . Most recent reply
![Mike Nelson's profile image](https://bpimg.biggerpockets.com/no_overlay/uploads/social_user/user_avatar/81657/1621415705-avatar-mikeynel.jpg?twic=v1/output=image/cover=128x128&v=2)
Deal Or No Deal? What Would You Do?
Ok here's the story, I have a Super MOTIVATED homeowner who just lost his job, got a divorce and has no cash reserves saved up. He want's to walk away from his property but needs $15,000 to find a new place and pay off his car.
I offered to buy his home subject 2 and I'm trying to mash the numbers to make this work. Here's what we're working with, the remanding mortgage is $134,398 at 4.5% interest and PITI $919 the ARV for this property is $189,000. The property could rent for $1,350 a month but I'm leaning more towards selling it with owner financing. This property is also in great condition and needs 0 repairs as the owners actually renovated it themselves after they purchased it in 2011 as an REO.
What would you guys do? Also, what rates would you offer a private lender for the $15,000 for lets say 5 years.
Most Popular Reply
![Wendell De Guzman's profile image](https://bpimg.biggerpockets.com/no_overlay/uploads/social_user/user_avatar/145149/1621419283-avatar-wendelld6.jpg?twic=v1/output=image/crop=600x600@0x0/cover=128x128&v=2)
Mike,
$15K is too much to give upfront. I would give him $5K for the deed now (and for him to move out) and give him another $5K when you find a tenant/buyer. You can easily get a tenant/buyer or sell this on owner financing and get $10-$20K upfront. In this way, you have effectively no money down and you don't need a lender for $15K. What's his alternative? Right now...he is getting $0 cash and his house can get foreclosed on.
@Brian Banks , you can't get a HML on this deal even if your life depends on it. Usually HMLs lend at 70% LTV and they require you to have 10%-20% skin in the game. How do I know this? HMLs are brokers and they utilize money from private lenders like me.