All Forum Posts by: Reid Ervin

Hello BiggerPockets community!

I have purchased an off-market property from an investor who now wants to sell the rest of his portfolio. The best part? The seller is open to seller financing, which presents an incredible opportunity to grow without traditional bank financing. The properties are well located in Denver with value add potential and all rents are currently well below market. 

However, there’s a catch—I’m looking to partner with an investor to help provide the capital needed to complete the deal (would need to raise around $200,000-500,000). While I can contribute some capital and sweat equity, I’ll need a partner to bring in additional funds to close the deal.

Here’s where I could really use your advice:

1. Best Practices for Finding a Partner
What are the most effective ways to find a solid investment partner? Is it this forum, meet-ups, or just reaching out and presenting the opportunity? I want someone who is not only financially capable but also shares my long-term vision for the properties and has experience with seller financing deals.

2. Vetting Potential Partners
Once I find a potential partner, what are some key questions I should ask or red flags I should look out for when vetting them? I’d love to hear about any successful (or not-so-successful) partnership experiences to learn from.

3. Structuring the Deal
What are some best practices when structuring a seller-financed deal with a partner? I want to make sure that both of us feel like the deal is fair and equitable for the risks and rewards involved.

Any guidance on how to approach these key questions would be greatly appreciated! I’m excited to make this opportunity a reality but want to ensure that I bring the right partner on board to make it a win-win situation.

Looking forward to hearing your thoughts and thank you in advance!

 @Kyle Baxter Thank you for explaining your thought process. Is there any adjustments you would recommend to make this deal favorable for both parties? Thanks!

 @Minna Reid Thank you for your advice! If those last three terms were removed would you purchase the deal / what would you purpose as a middle ground to make the deal work? Thanks!

Hello Everyone,

I'm excited to share that I've been on a journey to purchase my first house hack, and I've finally come across an intriguing property. The seller has proposed "Contract for Deed" financing, which appears to be a promising option since it offers a lower interest rate compared to conventional financing. However, as I read into the terms, I find myself unsure whether they are actually advantageous, as I'm new to this process. If any of you have experience with non-conventional financing, I would greatly appreciate your insight on these terms. Are they favorable for a potential buyer? Your advice would be invaluable to me, and I'm truly grateful in advance for any guidance you can provide. Thanks!

Summary of Proposed CFD Terms.

-All terms to follow the Dodd-Frank Wall Street Consumer Protection Act.
-The financial transaction is known as a, “Contract for Deed” transaction, wherein the Vendors retain the deed title until the property is fully paid by the Vendee.
-Fair pricing can be determined by both parties, simply based on comparable real estate, assessed capital improvements, etc. Everything is negotiable!
-6% APR 30-year fixed APR; minimum of 7-15-year term.
-Minimum 3.5%-5% money down.
-Vendor carries the principal and interest (PI) only. Debtor(s) pays the taxes and insurance (TI).
-Buyers pay taxes and insurance (TI) wherein the insurance remains on the existing policy of the owners, adding the debtor(s) as additional insured. Total for any mortgage is PITI.
-Mandatory annual inspection of the property to determine if such was being kept in habitable condition. If such conditions are unacceptable, the debtor(s) must comply to needed repairs or improvement or risk foreclosure.
-Owner will remain capable of refinancing for any reasonable purpose, and/or providing second mortgage esp. for capital improvements and repairs.
-All capital improvements esp. permitted jobs must be approved by the owner.
-The owner is offered first right of refusal if the debtor(s) wishes to sell, wherein it is believed that only the principle paid and capital improvements up to that date will be applied to the current value of the property.