[Patrick Slota]

Patrick Slota

I have an owner anxious to sell who has listed his house with me. He owes around $210,000 and market value is at highest $224,900 (listing price). He will be a short sale candidate as he will most likely get a lower offfer, if any at all, go negative at closing and he has no money to put into sale.

I started discussing with him today the idea of taking it off the market and selling it to me (I do have to disclose that I have an interest in the property) on a seller finance wrap He is open to discussion.

Here is the deal…he has a first mortgage of approx $170,000 balance at 6.5% and a second of about $40,000. I could most likely get $224,900 with low down and seller finance. But how do I structure this for most cash flow and maybe give him a little cash also?

Have the seller finance first mortage to me and I have him keep paying second while giving him some cash from buyers down payment and holding rest of down payment for me?

Escrow down payment from buyer after giving the seller some cash and take out payment from account each month to pay second myself?

Any other ideas?

[Anonymous]

Anonymous

Patrick,

Are you sure you want to own this house?

Looks like a good candidate for a sandwich lease or a lease option for now. You can always switch to seller financing later when you see what happens with the market in your area.

You sure don’t want to own a house that goes DOWN in value and this one is darn close.

proceed with caution

Jackie

[Patrick Slota]

Patrick Slota

I guess I said have him “sell” it to me when what I meant was have him deed it to me as a Sub-2 via a Land Trust…I just take on current loans, and find a lease/option buyer to “sell” to using Highest Bidder process for either price or down payment, create a 10% loan with a 2 year balloon.

[jimi hendricks]

jimi hendricks

This deal looks to thin.
You buy @ $210k and sell at $220k?
Yes, I see that you are in for nuthin and you create a profit in the wrap … but not much margin for error.
In this case, rather than “getting the deed” you may be better off with an option to purchase under the terms above. Then, during the option period, find the buyer and proceed as you laid it out.

Best,

jimi

[Anonymous]

Anonymous

Patrick

That’s what I’m saying you do NOT want the deed to this house. It is too skinny. And the way the market is going, it could get skinnier.

I would not do this deal as a subject to deal at all.

The only way I would even consider getting involved is a sandwich lease where your payments to the seller would allow you to have a $250 – $300 a month cash flow.

be careful on this one.

It’s better to do NO deal than to do a BAD deal.

Jackie