All Forum Posts by: Corinne Alconera

Thank you all for your valuable and most appreciated input! I am absorbing as much information as I can so that I can apply them toward future potential deals.

@Robert Adams I go back and forth between Nevada and Illinois. I plan on investing in both states, preferably through creative financing methods.

@Aaron Montague

Thank you for the explanation of the 1% rule. I will definitely use both tests in the future.

@Aaron Montague

What is the 1% rule? (Still learning….)

OMG … do you know that you are my hero on BP and on JustAskBenWhy???? No, I am not a stalker …. just a great fan!

Yes, I am unable to qualify for traditional financing due to the bank's crazy policies. Apparently my husband's per diem tax deduction is also unreimbursed expenses as far as the bank is concerned. However, I would like to keep the cash I do have on hand for repairs, vacancies, etc.

The terms listed are what the seller wants. I will be seeing the property next week and I plan to make an offer with my terms of 0 down and no balloon payment, reminding the seller that the bank's terms of 20% down and a 20-year fixed loan trumps his 20% down with a 5-year balloon. I'm sure his asking price of $159,000 is due to it being seller financed. Newer duplexes go for around $120,000 in this area and he has done some renovations to the property recently.

If he does not accept my terms, I am willing to walk away knowing that I had some great insight from some very knowledgeable and experienced investors.

Thank you all for such great insight on this subject! Everyone made a very good point. I guess I just got excited over the fact that I was even able to find a seller willing to do creative financing. I never even considered how the bank would look at this situation 5 years down the road. You guys sure opened my eyes!

I realize the importance of educating oneself on creative financing can be costly, but to gain such insight from knowledgeable and experienced investors that is absolutely FREE just blows my mind! Thank you BP!

Thanks for your replies Aaron and Brandon….since you put it that way…….

Yikes! Yes, 20% down is a lot of money and yes, I could do better with a bank than the 5-year balloon payment. I appreciate both of your input….this is such a great forum! I am so glad I found BiggerPockets! You may have saved me from making a huge mistake!

Aaron, thank you for the breakdown of what I need to consider when crunching actual numbers. You have included more numbers than I had thought about.

I will be reading your posts Brandon…,,

Hello K. Marie,

The $100 cash flow per unit is rent less PITI. I did not figure in the repair and vacancy percentage (the tenants pay for all utilities). I will be looking at the property next week sometime and based on what I see, I may rethink the numbers and submit my offer accordingly.

Thank you for your input K. Marie… it's food for thought.

Thank you for your comment Brant; however, I think I'll keep looking for a better creative financing deal. I know they're out there …. this is the second one I have come across …. it's just a matter of finding them.

Thank you Brandon. I guess deep down I knew the answer to my question, but hearing it from someone with experience makes me feel better about my decision to walk away from this offer.

Would you accept this seller financing offer?

Buy and hold 2-units

20% down payment

30 year amortized note w/5 year balloon payment

Cash flow is $100 per unit

Most 2 units in this area go for $30 - $40,000 less (traditional financing)

I'm interested in knowing what members think. This is my first seller finance experience.