All Forum Posts by: Derek T.

Just ran the quick numbers....looks like my hml costs would be somewhere around $20k for this deal.  Owner financing would be something like $4k.  So if I go up to $132k with owner financing it increases my purchase costs $12k but saves me $16k in financing.  So a net gain of $4k.  Any thoughts?

Not quite sure I am following the question regarding if he were any other person.  Normally I buy the house out right with cash or hml.

Yes when I go on calls I let the sellers know I will fix up the house to resell or rent it.  They normally don't care as they have their reasons to sell and they care about the bottom dollar.  In this situation he is tired of renters and tired of doing work on the house.  He knows it needs work and doesn't want to do it.  Rather leave it for the next man.  

In regards to keeping him around.......the house would be sold so I am missing how he would still be involved.  Just like my investors, he would get monthly payments and receive a lump sum in 4-6 months.  My issue like you brought up, is it really worth it to increase the price to save a few thousands on financing.  Good point. 

You can't make a deal where there is none.  If you have it locked up for too much then you might just have to tell the owner that your investor fell through and move on to the next house.  You can't sell, what you can't sell.

I have an off-market deal I am working. Normally I figure my cash number and offer it to the owner and we work from there. This owner actually mentioned that he would be willing to carry it longer for a higher price. Now I have a few rentals but I normally just flip and would like to keep it that way. I use HML so I want to see if I can structure something with owner financing to save on those costs. Here are the numbers....

My Cash Offer- $120k

He Wants- $132k

ARV- $240-250k

Repairs- $45k

So the house is already a decent deal but I would like to maximize the financing on this one if I can.  I just have never set up an owner financing flip so how would you go about structuring this?  Something like 5% interest only with a balloon in 12 months?  He says he is not desperate for the money now and would like to squeeze out a bit more.  This would probably save me about $15-20k in hml costs so I would be willing to give a little more for the right structure.

Last 5 houses..... 

#1- From wholesaler in July 

#2- From wholesaler in May

#3- MLS (Foreclosure from Freddie) in May

#4- From wholesaler in May

#5- MLS (Foreclosure from Freddie) in February

John on all of my listings I started to market only to non FHA buyers and it hasn't decreased my showings or offers yet (have done on the last 3 houses.... Since the beginning of 2015). I highly encourage my potential buyers to use the 3% down conventional programs or even the 0% down program that one of our local credit unions offer. I was scared at first to limit my pool of buyers but if they want the house bad enough they will switch to one of these programs. So I don't even touch FHA buyers anymore. Just my findings so far in 2015.

Bachelor's in Business Mgmt

Master's in Education (Curriculum & Instruction) 

3 years in doctorate program.  Stopped after coursework was done.... Didn't pursue it into dissertation phase. 

Rusty I think what the other guys are saying is that you need bring money,  a deal  or systems in order for someone seasoned to see it as a worth wild move to partner with you.  An experienced person already brings what you mentioned to the table..... Knowledge and drive.   Since you already learned quite a bit, put that knowledge to the test and lock up some deals.   If you find a deal good enough then you can present it to people to offer but as of now there isn't much to offer them.  The other thing you can offer is your time and try to bird dog and help out a seasoned guy for a small fee or as an apprentice. 

Welcome to BP,  wish you the best of luck. 

It might not be far off. The first thing you need to do is get a better more concrete number for you ARV. There is a $30k difference in your number so solidify that first.

The next thing is you said it needs a ton of work. Ton of work and $30k, don't go together in my renos. Depending on the scope of work, for a house that size I would spend anywhere from $40-70k and on average probably $50kish. So at $150k ARV and $50k rehab, I could buy the house at around $55k. Now if you want a $5k payday then you would need to be at $50k purchase price. Everything is dependent on the ARV and rehab numbers so try to determine those as closely as you can then move forward.