Owner financed duplex questions/advice

[Mike Webb]

Hi folks! Looking for some advice for a possible owner financed double duplex. The owner is in his 80's and is looking to sell off his portfolio. The property is a double duplex with 3 beds and 1 bath for each side. The property is in nice shape (siding, replacement windows and overall kept up). Each unit brings in $750/mo which is below market by about 75-100 each and tenants pay utilities. He wanted $130k but is willing to sell it for 95k. He is willing to carry the note at 6% but I think I can negotiate the price and percent a little bit more. He said "whatever you can afford to put down" he could work with. Obviously, it is slightly off the 2% rule but what would you consider offering to make this deal work? The property would appraise for about $115-120k. If you need more info, I could provide it...never have crossed the owner finance bridge and just looking for some direction. Thanks!

[Doug McLeod]

Would it cash flow OK if you financed 100% and consider PITI, HOA, maintenance and vacancy even if rent increases don't happen? If so, go for it. The paperwork is easy assuming he owns it free and clear (not a wrap or sub-to). Just get a transactional RE attorney to write up the docs (note, deed of trust, etc) and give them to the title co (or see if title will do). In Houston that can be done for $450 or less last I checked.