Put Way Too Much Money Into A House: Sell or Owner Finance?

[Zoabe Hafeez]

Hey Guys,

Just wanted to get some advice on a house I purchased that ended up being a headache. It's a 4/2/2 in Hitchcock TX that initially looked like a home run BRRR when I purchased it a year ago. Now, I've put in about 56k OOP (after 37k in unexpected foundation, flooring, and misc costs) into the property, have a mortgage of about 105k left and am hoping to sell this for about 155k-159k.  I chalked it up to a loss and expected to lose some significant money on the sale, lick my wounds, and try to come back stronger on the next one.

Now I have an offer for an owner finance with the following: 170k offer. Down payment of 20k (closing costs to be paid out of the down payment). 8.5% interest rate on a 30 year note ($1153 monthly payment) with a refi in 3 years. Of note, my PITI is $971 and it rented for $1350 before my tenants left.

What do you think? The math seems to work that I'd make money back in 3 years, but is it worth it to not have that cash to play with for that duration?  What would you do in that situation?  I have long term goals to 'buy the block' in inner loop Houston which would require significant fundraising regardless of my bank account, but there's still more I don't know than I know in that world.

[Marc Winter]

IDK, with less than 20% DP, I wouldn't do a traditional sale/deed transfer.  I WOULD consider a lease with non-refundable option fee.

If the buyer doesn't have cash for a decent DP or doesn't have the credit to finance the purchase with a mortgage lender, do you really want to be their bank?