All Forum Posts by: Corey Meyer

Greetings Everyone,

Thanks for clicking on my post!  

I am in the initial process of creating a "seller financing offer" to a homeowner who is interested in selling a single-family residential home.  The backstory is that this house sat on the market for a long time and the frustrated sellers took it off the market after a buy/sell agreement fell through at the last moment as the buyer backed out losing their earnest money.  The owners live in the house I am looking to put an offer on and would like to continue to live in it upon selling as tenants.  This works well for me as I am looking to purchase the property as an investment property and would gladly rent it back to them.

The owners are looking to build a new house in the country-side and live in the current property while they build and perhaps would move into a camper on the lot while they build if the property needed to be vacated but wouldn't be ideal as the couple has a daughter.  

The bank won't finance me on this deal as I won't qualify for another mortgage in the next few months as I just closed on another property. 

I haven't presented any kind of offer or mentioned anything about seller financing yet.  My questions for discussion are as followed:

1)  If the owner/seller still has a mortgage on the property can I still engage in seller financing?  Do I somehow get the mortgage transferred over to me?  

2)  Most likely the seller/owner will need the capital from selling this property to build a new place.  It might be difficult to convince them to an agreement.  Any advice on how I can pitch a win-win for both parties? 

I am guessing they will need to drill a well, bring in electricity, initial dirt work, etc.  I do have cash and could offer up to 20% down which should get the ball rolling on their residential development.  Perhaps I allow for the owners to live in the property during the duration of the seller-financing terms if they choose while they build?  How long would the seller financing terms be?  

3)  I have a lawyer who has written up contracts for me, should I go to him to write up a seller-financing agreement?

4)  A real estate agent did bring this opportunity to the table, how does she get paid?  Can she represent both parties? 

Thanks for all the advice, this property checks all the boxes for me in an up-and-coming market of SW, Montana!!!

Corey





 

@Aaron Hunt

Agreed. Having no track record and instability in personal finances, there will Ben resistance. Joining bigger pockets is a great first step.  2020, the year is here.

@James Williams

Get scrappy get frugal James. Take food scraps home from the restaurant everynight, bring home leftover soup and freeze it. Cut out food costs, don’t eat out and that war chest reserve of cash will start filling up.

@Patrick Clark

I would look at bringing in a 3rd partner whose sole purpose is to bring financial backing for the STR project in exchange for 1/3rd equity stake in the project.

You and your partner have the vision and bring the sweat equity, and management once it is up and running.

@Bijou Diaou

Find a partner who can finance the mortgage.

You bring the management and 50% down payment of the property.

50/50 ownership

For a property with a purchase price of $189,000.

Amortization: 25 years with a 7 year balloon. (What does this mean in laymen’s term)

Down payment (25%): $47,250

Loan amount (75%): $141,750

Rate: 5.03% on a 5-year ARM. Rate floats until time of formal loan approval

Pros / cons? Should I keep shopping?

@Matt Castle

The issue with putting the listing on all the platforms is that when it is booked outside VRBO the calendar receives a block versus a booking on the VRBO platform. This will affect the rankings and lower the listing in search results on all platforms. If demand isn’t a problem then it doesn’t really matter but if you want to crush it you may have to focus on beating the game on one of the platforms to get highest dollar per night.

@Troy Ritter

You have to keep the coal in the fire. It’s an ultimatum but when you offline from short term renting that coal is cooling. There are plenty of hungry hustlers doing all they can to beat you in the power rankings. You are going to have to play ball with the best of them. The competition is here to stay.

@Jon Hill

Concentrating on simplicity. Less is more mantra for 2020.

@Josiah Pisel I am going to try and partially finance this property with a HELOC of my Silverbow Condo.