All Forum Posts by: Eric Huebner

Free House. Not something we hear all that often. I ran across this story and am racking my brain on how I can make this a win-win deal for everyone involved. Long story short- there is a historic (1870’s) home that a nearby city in Wisconsin needs moved to make room for a library parking lot expansion. The house is free, but the “buyer” needs to pay to move the house off the lot by July 31st. I believe that the city is even offering a free lot for the home to be moved to, but I cannot confirm that at this time. I know that moving a completely intact house is very expensive. Just think of all the power lines in the way. Not to mention all of the permits needed to travel with a house on a trailer. Then there is the costs involved with getting it set on a foundation on a lot and hooked up to services. Has anyone ever done something like this successfully? Is it even worth all of the work needed? From the photos I have seen, I believe they may have the home set up as a three family, due to three gas meters in one of the photos I saw. So what do you think about this BP???? Here is a link to the news story they had on the home: http://fox6now.com/2018/03/25/theres-not-another-house-thats-like-it-and-it-could-be-yours-for-free-but-theres-a-catch/amp/

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Originally posted by @Gail Greenberg:

Hi @Eric Huebner Step 1: FIND OUT WHAT THE SELLER WANTS. Sometimes people care deeply about the interest rate; sometimes they want a certain amount of income to supplement their retirement - very possible since he's retirement age. Once you know that, I would approach it this way:

$425,000 Purchase price
-$42,500 You didn't mention a down payment but I'm assuming 10%

$382,500 Amount you're financing

Go here and play with the numbers to see how to get him what he wants. http://www.amortization-calc.com/

At 5.5% and a 30 year term, your monthly PI is $2,172
At 7%, your monthly PI is $2,545
Both are very manageable on gross rents of $625 x 8 = $5000

As far as a balloon, if he doesn't want a big taxable event NOW, he isn't going to want one in a few years either. Listen to people - find out what THEY want and build the deal around that. That's the key.

And further, I'll share something I learned last weekend at Pete Fortunato's seminar in Tampa. If this guy never wants a lump sum, you could refinance this property and take the money and go buy something else - in essence, put the mortgage you owe this gentleman onto another property. See what I mean?

@Gail Greenberg - THANK YOU for this breakdown!!!! You have brought up many good points that I didn't really think of in terms of the balloon payment/refi in the eyes of the seller.

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Originally posted by @Josh Green:

I’m in agreement with Pete. Having a shorter term balloon with a higher than Bank rate avg with a longer amortization on payment is a solid deal. I would recommend a long enough term on the balloon for you to be able to get some improvements done so that when your note is de you can get some solid cash out refi terms and be sure to have your llc showing some decent earnings for the 2 years before you plan on qualifying for a loan.

Sounds like a great deal! Nice job man!

Thank you for your response! The amount of time to owner finance was one of my concerns. I want it to work out for both the buyer and seller, so that it is a win-win for both of us.

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Originally posted by @Chad Nagel:

When I hold notes/ finance, I will not go below 10% on my interest rate. Risk has to equal reward. So anything sub 10% is a great deal in my eyes.

First, thank you for your response to my post. I agree, I need at least 10% down to have enough skin in the game, but how would this view of risk change, if at all, if the buyer had a perfect FICO score? My credit is perfect, and I have known the seller for many years, so hopefully the seller will be comfortable with the deal.

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Thank you Pete Schmidt!

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Hello BP!

I have an opportunity to purchase an 8 family apartment building in Wisconsin from a family friend. The owner owns the property free and clear and is looking to retire from the business.

The owner said he is willing to offer seller financing to help me purchase the property and help him defer taxes on the sale.

My question to the BP family out there is what are typical terms of a seller finance package?

The asking price for the property is $425k. Rents range from $650-$625 per month. It is well maintained in a B/C neighborhood. All of the units are currently rented. The units are in very good shape, but dated. I know this market very well, and the rents are at market rate.

I could give the seller a 10% downpayment. But this is where I get stuck. What are typical terms in a situation like this? I have always purchased properties with bank financing or paid in cash.

Thank you for your input in advance!

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Brian Klean I would be interested in any duplex, multi family, or foreclosure listings you have for Walworth County or the Mukwonago area.

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Justin Schaefer My parents have owned multi family buildings in East Troy since 1987. I bought my first duplex in East Troy 3 years ago. I would be happy to answer any questions you may have about the East Troy rental market.

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Thank you Deanna McCormick !

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Mindy Jensen Small world! I grew up on Lake Beulah, and my parents still have a home on the lake. Thank you for your feedback. You are great on the podcasts too! Keep up the good work.

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All Forum Posts by: Eric Huebner

Eric Huebner has started 5 posts and replied 15 times.

Post: “Free” House with a catch. How can I make this work?

Post: What terms would you negotiate for a seller financing package?

Post: What terms would you negotiate for a seller financing package?

Post: What terms would you negotiate for a seller financing package?

Post: What terms would you negotiate for a seller financing package?

Post: What terms would you negotiate for a seller financing package?

Post: CHOMPING at the bit in SE Wisconsin!!

Post: CHOMPING at the bit in SE Wisconsin!!

Post: Addendum for historical items in rental

Post: Addendum for historical items in rental