Hello Biggerpockets!
Ive been a long time browse and listener of this forum and have been looking to enger the market for a while now but the opportunity never showed its self untill now. I stumbled apon a seemingly great deal when purchasing a car from a private seller who was leaving the country. I got to know this couple who has decided to retire and move from Tilsonburg, Ontario to Croatia (I know.. Super jelous). As i got to know the owners better I discovered that they had made their small fortune in the last 20 years buying and renting student rentals in Hamilton. And eventually liquidated their properties and began private lending in both realestate and other ventures.
And so, they showed me their home. A 2 bed 1 bath upstairs and 2 bed 1 bath downstairs 1300sqft bungalo on a 80×160 lot. With separate side entrance to basement and a good potential for duplex conversion. Another exciting factor in this house is that it has a very large shop in the back yard. Specifically a 22×38 garage with a 10x22 2nd floor storage and a side shed addition which is 12x15. Absolutely massive, when i first saw it i genuinely thought it was another house in the back yard. It basically is as it has a wood heater, running water, sewage drain, and electricity. The house its self has had a complete renovation of the exterior and garden. The interior is going to be renovated in the upper ans basement will habe two rooms and a washroom (id be adding the kitchen)
We have spoken to realtors in the london area and 3 have confirmed the home will likely sell for 600k as some homes on the same street sold in the past month. The owner has offered a non set in stone proposition that he would be comfortable selling it to me via a vendor take back deal at 550k and that i can do a 10% down payment at 5% interest. I also have an A lendor Broker willing to help me get the 1.8% interest as long as i have 10% equity in the home.
My goal is to convert to a duplex rent both upper and lower units and rent the garage and at minimum break even on all costs including maintenence and vacancy and so on...
The thing is this is my first home purchase, and certainly the first time dealing with a private lender. And so i have come here for the great wisdom of many the like minded people of Biggerpockets.
My issue is that im having a hard time finding comparables because the house is so unique. I know it is in a good area and the homes have no troubles being sold. But each house on the same street is in different conditions, sizes, lot sizes and do not have the unique feature of a ginormous house garage.
If there is any advice you can provide me I would be quite greatful. From what i have gathered it is important to get the home inspected. I have also been told to have the home appraised not sure this is necessary when three independent realtors have said 600k.
My main concern here is structuring the vendor takeback in a fashion that benefits both parties in order to make the deal happen. If anyone has experience with private loans or vendor takebacks i would love to hear how you structured the deals and if im too far off the mark. Should i be asking for lower tham 550k to have a greater built in under market cushion?
Any advice would be amazing. Cant wait to hear it!
Let me know if you need more info to get a beter picture of this deal.
Regards,
Long time lurker
Matei
