Triple threat Strategy: Cash, Terms and more terms.

[Samuel Hall]

Hey folks, let me know what you think of this deal:

Property: 4bd/2ba/1891sf. SFH Built in 1914. There are some stains in the dropped ceiling, and there is one corner of the house that has settled resulting in broken tiles. I don't see any crumbling of the foundation, it's just an old house. But it is definitely something that should be looked at thoroughly. It may work as a rental with some superficial updates, but definitely needs updating as a flip. The bones are good.

Seller: They are moving to a different state, and want to sell quickly. They are closing on another property this month. They are not hurting for cash, they just want to be done with the property and move onto the next stage in their life. The sale of this property doesn't affect their closing on the next. He intentionally FSBOd towards investors to receive a quick cash offer. He said that he has spoken to many investors, but they either flaked out or their offer was too low. I asked him what he wanted. He said he owes 143K, he wants to put 150-160 in his pocket and therefore wants 305K purchase price. I estimated his monthly payments are $989. I asked if he was open to selling on terms. He said that he didn't want to deal with anything "subject-to" and just wants to walk away from the property. I get the sense that he is relatively educated about real estate. If he doesn't get the property under contract by Monday, he will list it on the MLS.

Comps put the price per square foot around 170.97, ARV is 320-330 conservatively. Inventory is low and I think he could successfully sell it on the MLS. I think the settling foundation could scare off many retail buyers.

Here is what I plan on offering him:

1. All cash offer.
   1. 260K purchase.
   2. Closing in 10 days
   3. Sellers net $108,124.00
2. Interest only W/ 5 year balloon
   1. 305K purchase
   2. 4.5% interest
   3. Monthly payments of 1143
   4. Sellers net $230,625.00 (after 5 years)
3. 30 year amortized,
   1. 315K purchase Price
   2. 3% interest
   3. Monthly Payments of 1349.
   4. Sellers Net $342,688.00 (after 30 years)