All Forum Posts by: Benjamin Cowles

If someone was offering seller financing on say half the purchase price and your other funding source would only offer financing with a first mortgage would you attempt to get financing from the owner with a second mortgage?

I would imagine in most if not all cases that would be out of the question but I don't really get the point of second mortgages from the viewpoint of a lender anyway with the outcome of the borrower defaulting and the position it puts the second mortgage holder in. Then again I don't quite get the point of second mortgages from the viewpoint of the second mortgage holder as an investment.

So am I wrong about this and second mortgages can be negotiated, and if so how so? How do you sell someone on a second mortgage?

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Originally posted by @George P.:

Has the seller indicated why she wants to carry a note? Is it the income stream or inability to sell the conventional way - I think this is very important to know when you present your offer.

Um, I would imagine he might just want to bypass the agent fees no? He apparently is an investor having a good handful of properties. Told me he's worked for/studied under trump. Idk but if imagine most experienced investors bypass realtors no?

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sorry this is a double post. Please refer to

https://www.biggerpockets.com/forums/12/topics/320...

Any mods reading this please delete. Sorry, thanks

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Originally posted by @Art G.:

I do not think you will get the seller to do 1%. There is no meat on that interest rate. Shoot for 3%. Your pitch is that 3% over 30 years will add $93,199 in interest payments to the sale price of $180,000. For a total to seller of $273,199. Banks will pay him 1% or less to put it in savings, so you are offering a better return to him.

Assuming your numbers are accurate and making a few assumptions as to costs that need to be added to it, I broke down the deal and the numbers look good. Here is what I came up with.

180k @ 3% over 30yrs= 758.89/mo or 9107/yr

Total interest over loan is 93,199

+ 10k for initial repairs

Rents 875+900= 1775/mo x 12= $21,300

Insurance= 800/yr

Taxes= 1,800/yr

Maintenance= 1000/yr

Total Expenses= 3600/yr

Loan Constant= 5.06%

Cap Rate= 9.83% (9.31% if 10k put into rehab)

Spread= 4.77% (4.25% if 10k put into rehab)

ROI= 85.9% (10k for rehab)

NOI= $17,700

BER= 59.65%

DCR= 1.94

A DCR of 1.4 is your minimum, so at 1.94 you are looking good. A BER should be below 85%, you are at 59.65%. I had to run to sets of numbers to see the difference of adding in the 10k for rehab. Both came out good.

Below is the payment schedule for a 30yr at 3% for 180k.

Thanks so much buddy. I'll have to sit down with this for a bit...

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Originally posted by @George P.:

Has the seller indicated why she wants to carry a note? Is it the income stream or inability to sell the conventional way - I think this is very important to know when you present your offer.

Thank you. Will keep in mind. We're going to reschedule

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Going to meet up with seller to discuss potential deal with seller financing. something I've yet to do. I'm planning just to get a rough tentative idea of how we may come together the numbers for an initial proposal and take it to an RE attorney.

Despite all that I've learned so far in the last couple years I'm sure I'm going to forget to ask important questions and other important things to keep in mind. so if some things come to mind that beginners often overlook feel free to throw them at me.

This is 2200sf duplex in a B'ish neighborhood. maybe C+? My research suggests it's worth around $100/sf and rents at $.8-1/sf(not sure if you guys ever look at it that way but it came the easiest way to me).

I'll anticipate at this point it needs <$10k to get in top condition. Tenants in place paying $875 and $900.

I'm seeing I could pay up to $220k over 30 years at like 1% max APR to be good. Or at say $180k at 3%. Does that look too close?

I'm factoring in 30% of gross rent for PM, maintenance and vacancies adding a bit over $500 to the monthly PITI payment which couldn't exceed $1100 in order to net me $200/month from $1800 rent income. What am I missing?

Should I require the deed or if seller insists could a land contract be a good idea?

And lastly can anyone recommend a good affordable RE attorney in (Lee county ) Cape Coral/Fort Myers area? Thanks guys

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I'll anticipate at this point it needs <$10k to get in top condition. Tenants in place paying $875 and $900.

I'm seeing I could pay up to $220k over 30 years at like 1% max APR to be good. Or at say $180k at 3%. Does that look too close?

Should I require the deed or if seller insists could a land contract be a good idea?

And lastly can anyone recommend a good affordable RE attorney in (Lee county ) Cape Coral/Fort Myers area? Thanks guys

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bump? Can you bump your own threads? Bump.

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good luck Daryl

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Originally posted by @Helen Kirk:

At our courthouse (Lee County, AL) there are cubicles available to the public where you can look up any property and see what mortgage or liens are on them. I've passed up a few properties from what I've found on them.

Thanks Helen. How reliable and thorough do you suppose or know this info is compared to the info that a title company uses?

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All Forum Posts by: Benjamin Cowles

Benjamin Cowles has started 92 posts and replied 441 times.

Post: Would you try to negotiate the seller take a 2nd mortgage?

Post: About to negotiate a seller finance potential deal. advice?

Post: about to negotiate a seller finance potential deal. Advice?

Post: About to negotiate a seller finance potential deal. advice?

Post: About to negotiate a seller finance potential deal. advice?

Post: About to negotiate a seller finance potential deal. advice?

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