All Forum Posts by: Brett Hearn

Yeah, that might very well be the advice I take.  It's hard because I know the exact rent and costs per month as I talked to the seller and know him very well.  Just because I see an educated potential deal doesn't mean it is the best.  Thanks Matthew.

Zach, that is a very good point.  Yet, if I could get him to agree to $2000 down and 8% interest only for 6 months, or until I could refi, if my calculations are correct I could still be getting $1375 cash flow during those first 6 months.  Then refi and pay him off, getting a lower interest rate.  I only wonder if this is good enough incentive for him. Of course my cash flow would go down to $400 or so after I refi and start paying more than interest only but he will be out of the picture and I could go from there.  I believe I remember, from my reading, that banks only offer 80% of the total value of the property for a refi.  Is this true?

Again thanks a lot for the comments all.  It really does help putting things into perspective.  Wish I had more to offer!  Soon!

Hi Arlen,

Thank you so much for the reply.  The more I have been reading the more I can see that approaching him for seller financing is the way to go.  I just wonder what would be a good game plan.  For example I was thinking $2000 down and 7% on a settled amount per month (although I'm not sure what that would look like, $1000, $1500 a month?  Also, how quickly could I refi?  I have over 800 credit score but, again I'm very new to this whole thing.

Arlen, thank you so much for the advise.  I was thinking the same thing so it is nice to get a bit of reassurance from another person who has actually done this before!  Anyway thanks again.

Hi all,

I'm new to the site and new to the process, but jumping in!  I've been putting in the time in the books and on this site so I have a general question for all.  I live in the bay area but have an opportunity in my hometown.  It is a 5 unit complex listed as residential.  I know the owner personally, as I grew up around him since my best friend is his uncle.  The property is listed for $315000 and each unit makes $550 a month totaling $2750 a month.  I do not have the cash for a down payment of $97000, so I was thinking of going with the Master Lease Option.  Yet, I'm not sure what to offer him.  I know that he is motivated as he just purchased ranch property and needs to offload some equity for capital gains purposes, not because he needs cash.  I've been racking my brain because when I compute all the numbers I could be getting $450 cash flow and that's including property management.  

I have spoke with him on the phone and he was open to ideas.  How would the whole MLO work if I were to lease the property, keep the current tenants, then refinance and pay him off?  I really just don't get the idea of him carrying the note and then me refinancing.  Any help would be wonderful.  thanks everyone for your time, and this is a lot of fun!