You must be logged in to reply to this topic.
-
Ok, I’ve got the house picked put that I want at the lake. The sellers moved out in April. I found out yesterday that the wife has cancer that has come back a 2nd time and they moved back to Dallas to be close to their kids. They are completely open to seller financing and/or a lease option.
They already bought a house in Dallas. The house at the lake has a very small mortgage on it ( $120,000 from what I can see)
I will want to add french doors to the back of the house and a large deck and need to build a new boat dock, plus the house needs cosmetic interior
It is completely liveable like it is now. so, I want to conserve cash and put as little down as possible.Ideally I put down 0 — but since there’s an agent involved I don’t think I can get away with that because their commission will come out of the down payment.
So, I’m thinking $12,000 – $25,000 down will make it work. No payments for 6 months would be great. But I will make payments of $1500 – $2500 per month if necessary.
The house is worth about $450,000 – $500,000
It is listed at $349,000 – and the agent said they are “flexible”
I’m writing up a letter of intent today.
What offers would you put on the letter of intent?
I have also considered trading some of my rental properties for the house I want to buy on the lake.
Since I won’t be able to live there full time for a year anyway this is a good way for me to convert the equity in my rentals to Section 121 later.
The disadvantage is that I’ve got great rental properties in great areas with great tenants and great cashflow so I it would be hard to give up those assets.
But getting a free and clear lake property sure does sound excitng.
Should I trade in my rental properties or just go with seller financing to buy the lake property?
From Jack Miller: When you buy something you want to use yourself, there’s a lot more on the table than the economics of the deal. Without knowing anything more about the seller – especially if he intends to remain in the new house he has bought, and what his financial needs will be, there are two basic approaches that will accomplish what you want to do: To conserve cash, offer to pay for one year’s rent in advance with a full credit against the down payment and for an Option to purchase at your negotiated price and use that year to improve the house. If he isn’t going to remain in the Dallas area after his wife expires, you also might try to bundle an Option on that house with the deal without any further consideration. The payment terms on your Option would be the same as the second offer:
The second offer might be to pay half of his equity at the end of the first year, and the other half in five years. It would be a mistake to consume desirable investment property to buy a residence house. Instead, use the year to acquire some houses you could sell to raise the cash for the payment, or you could sell some less desirable houses and exchange them to close your Option. This would move your equity into the new house. In five years, you could sell out and capture your equity tax free.
You must be logged in to reply to this topic.
