Rex whole sale, owner financing

[Kelli Huang]

I am buying my first property that is intended for rental. After scouting all over zillow, I found this for sale by owner 3/1.5 for $46,900. ARV is about $70k. I contacted owner right away and ask If he could do owner financing because it is such a small loan that will bye hard to find a lender for it. The seller agreed on $20k down, 6% financing, and $2k ernest money. He is flexible with the terms and he is also giving me a little discount on the sales price.

He won the bid on this house from auction.com and it was a bank owned property. He is not closed on the house yet. I will close on this house the same time he closes it with the bank. I gyess this is what you call a double closing? 

We went to see the house together but he didn't get the key to the house from the bank yet so I didn't see the inside of the house, not even pictures. But he believes the repair will be less than $1000. Our contract states if the repair is more than $5,000, I can back out of the deal and get my EMD back. Sounds like a pretty good deal?

There are a few problems. D&D period is 14 days but we can't see the inside yet. The closing will be approximately in 2 weeks and the seller told me that We will see the inside before I buy it. But I dont know how that will go. The area of the roof under the gutters have some dry rot. I need to figure out how much that will cost to repair. And for the$20k down, I am doing a cash out refi on a home to get the money. But the lender just told me today my income isn't enough for the debt ratio. So now we have to bring my husband on the loan. His credit score hurts me a lot. The rate went from 3.5 to 4.875. Plus now I have to pay more points. The new PITI is now$577. Wow. The house I am doing the refi on justvwent from 2% rent to 1% rent. I am starting to doubt that I am making a right move here...