All Forum Posts by: Jesse R.

@Ingrid J.

Even though I am trying to buy the house as a rental, you want me to try to negotiate the price down to a profitable flip price?  Could you explain this a bit more please?  I understand you want to leave some equity built into any deal you make, rental or flip, but to walk away from a strong deal like this because the owner won't drop the price to ~.70 on the dollar seems overly aggressive to me. 

@Ingrid J.

I don't know exactly why but I can speculate a bit.  My guess is the money.  He is a savvy guy and knows what price points would make for a workable flip price compared to a workable rental price.  I highly doubt there is anything malicious or sneaky in him making that comment.  That is not to say that I won't try to get his price point down a bit with some negotiating.

@Aaron Montague 

Thanks for the response.  That was very helpful.

The numbers that I have at this point are as follows...

HOA - $30/month

Taxes - $100/month

Insurance - $250/month

Management fee - $140/month ($1400*10%)

Sewer, water and utilities are paid by renter.

I'm currently speaking with a loan officer about a cash out refinance to see if I could qualify for one as well as what the numbers would look like.  

The owner is a "straight shooter" type of guy and a long time family friend so my plan was to lay out my situation to him and see what we could figure out from there.  I was also trying to brainstorm on some various owner financing situations to bring to the owner when I have that conversation so i can suggest ideas.  Do you have any suggestions on typical owner finance structures?  Or would you suggest just speaking with him first to get a better sense of the situation, then bring suggestions to him at a later meeting? 

I will also update when I hear back from the loan officer.

Curt, 

The ARV is in the mid 130's. I think he is open to owner financing but as long as he can get his mortgages paid off. I will get with him to get those details and give you an update.

The repairs are roughly $7.5k-10k. I plan on doing some of the work myself(paint) to save on labor costs.

Howdy, 

Long time lurker, first time poster.  I was waiting until I had a good scenario/question to pose to the group before I made a post so here it goes.

I've been speaking with a client of mine who wants to sell his SFH in the Spring area. I know the market well and am confident in a rent of around $1400 give or take $50. The house has 3 bed 2.5 bath, 2300 square feet, brand new roof and new a/c unit(2 years old). The interior needs paint, flooring, appliances and minor touch ups. The exterior needs minimal work. Overall the house is in very good condition in a nice neighborhood.

After speaking with him, he owes $30k on the loan and wants to sell the place to be able to pay that property off as well as his primary residence, which I believe was around the same amount owed.  He is willing to sell the house at a discount because he doesn't want to do the work himself, but he did mention he wasn't going to sell it low enough to be able to flip.  We have not talked numbers or financing yet but he said I can bring in an inspector to take a look around.

The last piece is that I'm self employed, earning around $30k a year, no debt, around $35k in cash I'm willing to invest, though I would prefer not to spend it all on one property.  From my research and prior loan experience, I am not too confident on getting a loan large enough to cover this type of property.

I would love to do some sort of owner financing that gets him paid and still have a solid cash flowing rental.  Does anyone have any suggestions on how to finance this type of deal or general thoughts on how I'm approaching it?