Calls coming in, need some creative ideas for sellers - Posted by breeves

Posted by Tyler on April 23, 1999 at 01:47:49:

or is this your business partner?


no nasty postcards, please.

Calls coming in, need some creative ideas for sellers - Posted by breeves

Posted by breeves on April 21, 1999 at 21:16:18:

My marketing is paying off with calls from sellers. I’ve have recently found out how hard it is to get positive cash flow for SFH rentals when you buy at 85% of FMV and borrow 70% or so of the purchase price with seller holding a second on good terms. My cash flow analysis still comes up negative or break even. I force the numbers to get a small positive and the purchase price has to be around 70% of FMV. I have several out of state sellers that have free and clear rentals that want out but will not sell that cheap or hold a large second (50% or more). What would you offer a seller with free and clear rental property that just wants out with a majority of cash up front?

I was thinking of offering a long term lease that would take the burden of out of state property mgmt from them and L/O it to a tenant/buyer, but all are currently rented with long term tenants. I know I may get the tenant to do the L/O, I would just have to interview them to find out their situation. Any thoughts would be appreciated.

Re: Calls coming in, need some creative ideas for sellers - Posted by Brad Crouch

Posted by Brad Crouch on April 24, 1999 at 24:12:13:


Tell the guy to refinance the property for all he wants or all he can get. Then put the property in a PACTrust and at the end of the term (a few years) the seller gets back the costs of the re-finance and the rest of the equity he has in the property.

Then find a buyer who can afford to come in with “closing costs” and a few months of payments for the contingency fund. Then you have “sandwiched” yourself similarly to a lease option.

Good luck,


Re: Calls coming in, need some creative ideas for sellers - Posted by BankRobber

Posted by BankRobber on April 22, 1999 at 22:45:23:

Congratulations, you figured out that SFR’s do not make good Buy and Hold Rental investments (except in a few unique markets). Some people do not figure this out till after they have purchased a couple.

Re: Calls coming in, need some creative ideas for sellers - Posted by keithk2

Posted by keithk2 on April 22, 1999 at 24:26:37:


Sometimes sellers of single fams get stuck in the “retail price” mindset even though there’s a tenant sitting in their property. It’s part of the negotiating process and some sellers come around while the rest sit back and wait for a “fairy godmother” to come along and pay all cash for a negative cash flow property.

I don’t know what you’ve offered him so far but I’d first want to know what’s important to him to make the deal work. If they don’t want to carry a large note, perhaps you could arrange for more of the purchase price to be covered by the note and sell the note at closing. You could present it as an exchange between more cash in hand against higher overall price. Offer it as an all-cash deal subject to new financing and contact a note-buyer who has experience in “table funding” a note. It might work, it might not.

If a seller isn’t sufficiently motivated to structure the deal so that you can get an acceptable return, then he or she just isn’t motivated enough to waste your time on. Thank them for their time, move on to the next deal, and check back with them in a month. If I had a nickle for every investor who wouldn’t budge on a deal yada yada yada…

I hope this helped. I’ve discovered that this area of investment is like panning for gold. You’ve gotta shovel about a ton of sand and gravel to put the handful of gold in your pocket but the value of the gold makes it worthwhile.

All success

Calling All Crooks. - Posted by Steve Meiners

Posted by Steve Meiners on April 21, 1999 at 22:06:19:

A intelligent and honest person would be content with offering 100% of the FMV, only a crook who is out to take advantage of someone would offer less.