All Forum Posts by: Luke Rusten

Thank you for your replies - much appreciated. To be clear I am not really looking for someone to analyze the deal for me, but more-so looking to see if I should be thinking about anything in particular that I haven't been.

Since you asked - I believe I'd be paying approximately 20% +/- above market value. The rents are on the lower side, but I am also not looking to raise them significantly as the best thing about these properties IMO are the very long-term tenants.

When I do the math, I'd have a lower monthly payment and pay less interest over time even at that premium price versus a lower price and lower rates in the next year or so, but I likely wouldn't be able to sell any of the properties at that value for quite a while.

Is there anything I should be thinking about that I am not? Is this a deal most investors would walk away from regardless of the rates/terms because of the premium? 

 Thank you for the input. Would you consider it if the rates were as low as 2%? That is where I am getting hung up. At that percentage I end up paying significantly less in interest over the length of the loan, but where I get into issues is if I ever want to/need to sell any of the properties before they can appreciate in value to be worth the list price. Sorry, I should have provided that detail in the original post. 

Hello friends,

I found a seller financed listing where the seller is asking for a significant premium on multiple homes, but they are open to low interest rates and 40 year terms. These homes have long term tenants and will cash flow albeit slightly under $100 per unit if I don't raise rents. My calculations are based on 2 sets of numbers - the numbers the seller has provided, and my own calculations accounting for 5% for vacancy, 5% for repair, 5% for capex, 10% for property management and actual costs for property tax/insurance.

I am trying to decide if this deal is worth pursuing or if I should walk away due to the premium on the homes. I don't love the idea of essentially being locked into holding them for a long time because it may take many years for them to appreciate enough to meet that premium, but I do like the idea of cash flow, low interest, and longer terms. I do intend on holding them for a long time, but again this limits my flexibility in the short-to-medium term.

Does anyone have any thoughts/suggestions for me? This is my first deal of this kind and I want to make sure I am considering everything.

Thanks in advance!