All Forum Posts by: David Flores

@Souleymane Hanne

Ask the seller to carry the down payment. Its called seller financing. Let them know its the only way you can get the deal done, depending on their motivation they may agree. I have many properties where the seller carried the down payment.

Listen to episode 1 of my podcast “No Money Down Real Estate Investing” on itunes or spotify. It should help a lot! I go into a lot of detail about seller financing on there. Message me if you have any questions!

@Dennis M., very interesting strategy. I have heard of a similar strategy but instead of increasing how many monthly payments the buyer would increase the purchase price. 

Are these sellers allowing you to put down no down payment though? How much are you usually putting down and what do your terms usually look like (how many years are you paying)?

Hi BP World! 

I am looking into a mobile home park in Colorado. I was wondering if anyone with experience in mobile home parks located in Colorado could guide me on a few numbers. I want to breakdown the acquisition price of the property. The way I want to do it is breaking it down per lot. From a really high level I am looking for the average price per lot in a normal Colorado mobile home park deal. The park is located about 1 hour from Denver. The park is only lots and they do not own any of the actual mobile homes. We are just talking about lots. 

Anyone with knowledge on this would be hugely beneficial! 

@Nicholas Andrews

I personally was able to get extremely good terms with the seller I dealt with. My interest is 5.5% which is above the bank mortgage i have by .5%. I plan on converting the 14 person parking lot that came with the properties to not be included in the rent and have it paid by month at 50 dollars when the leases are up. This will raise the yearly income by 8,400 dollars and when we refinance they will be using the income approach which will get me to 84k in equity out of the 110k needed. But we also had our place appraise for 75k more than the purchase price so we will be able to pay off the seller when we refinance.

I only do these deals if the margins are high. The cap rate on those properties is 12% and is cash-flowing 1800 dollars a month after all expenses including the second mortgage. Yes this is a great deal, but great deals are the only way you can successfully pull off seller finance situations. If you need to pay off the seller quickly in order to cash flow the margins are not big enough unless you are a contractor who can quickly renovate and pull equity out.

@Gilberto Fuentes

If you purchase an owner occupied home you are not penalized for taking money out of your 401k. I have experience doing this. It is called a hardship withdrawal and a down payment on an owner occupied unit is one of the situation you can get a hardship withdrawal.

That being said a house hack would be the most beneficial in your situation. Put down 5% so you avoid the PMI after you get 20% equity.

@Carla Gordon

I would hop on a call with the agent and you can always get other quotes to compare. Not sure what your area is like but it may be on par. Check with other companies and see what you get back.

@John Tarricone

Sounds like a terrible situation. I would threaten them with eviction if it continues but I am sure you have tried this.

I have a property management company for all

My properties so I wouldn’t be able to go to much into the process and I have been lucky enough not to have an eviction yet.

But, i have read about a great strategy that maybe someone else can touch on here. Its called cash for keys. Make a deal with the tenants that if they leave the property unharmed by a certain date (make this date short so they have a less likelihood of destroying anything) you will pay each of them like 200 dollars or some other amount that makes sense.

You can also look it up online. Its called cash for keys and may be extremely beneficial to you. You are also avoiding lawyer fees and an elongated process with this.

@Kyle Wilkins

If you have any questions a about seller financing just let me know! Dm me I can deff help you out

@Michael Chilton

I agree, you can also rehab a property to get your equity, you can have the seller extend the terms long enough so there is no risk on the second mortgage, or you can also just keep finding lenders to keep extending your loan.

I have heard of a strategy from a person on bigger pockets who only buys seller financing properties and instead of paying them off through a refi they just keep finding private lenders to assume the loan. Its definitely not for the average investor and need to have a finance background/thick skin to get these done. Also margins need to be high to have two loans going all the time. I am sure in Des Moines this is possible though.

@Michael Chilton

Not many people are going to sell their property 75% of market value. What I have done on a couple deals was have the seller carry the down payment which got me the property for nothing down. Then I did the math as to when I would gain 20% equity in the property so I can refinance. I was able to get about 11% equity after appraisal and after 8 years I will have the 20% equity I need to refinance. This is given that there is 0% appreciation as well to stay conservative. So that is what we did for the seller financing terms.

There is risk in the deal. If after 8 years the market is severely hurt I would have trouble refinancing. The seller has the second though so they can not foreclose. I have a good relationship with the seller so if this does happen my plan would be to re-negotiate longer terms.