All Forum Posts by: Mike Flora

One of the biggest things is how motivated he is to sell that thing. The more motivated he is the better you can get your terms and make it make sense to you and what your looking for as well. He is old and doesn't want to wait long for his money so keep that in mind for what your purchase price will be, the terms you use and then how long until your note is due. You don't want to get stuck in a situation where you can pay off the note. I put together 4 year notes to older sellers and give them a higher purchase price than I would on my all cash offer. Keep in mind that Im a SFR guy so your situation/property is a little different. I will usually make purchase price 20% off the ARV, set the principal amount to never change each month for the 4 years and then have 1-2% interest on the remaining balance due. I purchase the property as is but my purchase price could change due to property condition. I make my play in the cash out refinance option so I put as much principal into the monthly as possible and have tenant monthly payment cover principal, interest, taxes and insurance. The rest is on me, but in 4 years with basic market growth, keep in mind im in California, I will do a cash out refinance and get apx 70K tax free money out of it and still hold on to the property. If the market turns I still can do a cash out refinance and then do it again when market recovers. Pretty safe deal for me. Remember, this is a SFR in Southern California, but maybe this idea will keep your mind working to put something together that makes sense to you and your seller. Gather as much info from your seller about the property and use it to your advantage to present your seller finance offer to him. Anything that can help him make that decision with you. Spreading out taxes, collecting the same income as he is now from it from your monthly payments if he does the deal with you, etc etc. I LOVE SELLER FINANCE DEALS!!!!! Let your mind work and get creative and talk to the seller about it all till you make it work. If not then move on

@Jay Hinrichs LOL I get a couple that talk Jay. Not all of them give up the info, Im just transparent with them and tell them what I got and sometimes I just get....."its very close to listing price, " or they will give up the exact number. All that info gives me a good enough idea of where my property sits in value once I'm done with rehab. We can't just look at recently sold down here in California anymore and then expect 3 offers in 4 days. 

@Austin Shandley does the seller own the property free and clear?? Ask the seller to carry some paper for a while and work out some terms that work for both of you.

@Brian Kittner another thing to look at is what is pending sale that is a close match to your property in the area. I find pending sales, look at the pictures to see what I’m gonna have to do to get the desired price against my competition. Then I will call the listing agent on those pending sales to see if they got full asking, did appraisal come back good, how many showings did they get before they got an offer etc etc. Southern California has slowed and dipped a little in certain areas so only looking at recently sold properties is not the way to go. You have to look at what’s up for sale and pending sale cause that’s gonna be your competition!!!

Yeah, this is not really a deal but if he is stuck on such a high price then tell him to carry the note for a while with low interest and low down payment. Put together some terms for him that will work for your friend. Otherwise just move on.

Does the owner own the property free and clear? 

@Nancy Lucca hi Nancy, I invest here in California and it's a bit fragile right now but certain areas have just slowed and not corrected. Some price drops in areas and all markets have slowed but some areas are still going up just taking longer to sell. Now since you are looking to buy for your primary it is a little different. Do you qualify for a VA loan? If your concerned about the area your buying in is going down then look for a loan where you put as little of your own money down and pocket your equity from the home sale where you live now. If you own right now that is. Then if the market turns your losing as little as possible. Best advice to give if your talking about buying a primary residence. As little money down as possible that meets your budget for your new primary residence.

I have a motivated seller in Bremerton with a SFR she wants to get rid of. Im in Southern California and this is not a straight up deal, but possibly something there with numbers seller wants and the property. No idea about that market up there so if interested call or PM

@Daniel Kern if the owner is dead and the property is still in his/her name and it’s not in a trust it will have to go through probate. If so then it’s most likely just gonna go to auction. Probate takes a while and it can get messy. If it’s in a trust then find the executor of the trust and talk to him/her about purchasing the property.

@Angela Vargas how we do this is we would have a check for a certain amount we agree upon for the buyer at close of escrow. So if your new driveway they would want cost 6K then we would negotiate whatever price, let’s say we pay half, and we send a 3K check to escrow for the buyer to get after close of escrow.  Buyers like this more cause they have cash in hand at close! They do t necessarily have to do the driveway and do whatever they want with the cash. BUT IT GETS THE DEAL DONE INSTEAD OF THE BUYER CANCELLING and you didn’t have to pay for the whole thing up front. Now certain things do increase the value for what you pay for it like new kitchen, flooring etc etc but some things wil not give you back as much as you spend on them so better to negotiate sometimes after you open escrow with buyer and homeinspection report comes back.