could someone expand on this GARCIA post… - Posted by BILLY BOB
Posted by BILLY BOB on April 09, 2002 at 12:34:38:
this is the quote from ED:
‘You could ask the seller to sell the property to you cheaper and adjust the seller carry-back accordingly. I haven’t discussed this much, but there are legal ways the seller can kick back some of the sales price to you.’
here is the link to the quote. unfortunatley, others asked for clarification as well but ED did not respond back. ED if your out there, or others out there that KNOW, all ideas would be appreciated.
as it would be, i have found a deal that could benefit from knowing some/this additional info. TIA for any advice or input.
i have made an offer to a retiring LL for 2 duplexes. market value is ~125k per. each will appraise for more. all are rented in a great neighborhood in a growing community with long term tenants all paying 50-100 below average market rents and are aware that an increase is looming. appreciation has been 5-10% per year for last ten at least. i offered a cash price of 220k for both duplexes. the seller thought was a bit too low. so i countered with 240k. 190k new loan to cash him out (LL has minimal mort left) and he carry a 50k note with no payments/no interest with a 2 year balloon. he is interested now (accepted, contingent on fin/inspect). i am comfortable with the numbers the deal produces, what concerns me is structuring the deal and getting it through. my first question is: can i get these 2 duplexes under 1 loan? would it be commercial? would that be better or would there be benefits to getting 2 seperate homeowner loans? what are the tax implications to the seller for the carry back? bottom line how would the pros structure this deal.
appraised value 260-275k
240k sales price
50k carry back
i need 190k to seller
rents 2400; 600 per with long term tenants in place with no immediate expenses due
would like to put no money in deal up front but could do 5-10%
exit strategy is enjoy the good cash flow for 2 years (put into other investments) and refi one or both props at balloon time to pay off seller carry. and yes i know rates will probably be higher in 2 years so i may not wait that long. but these will be long-term rentals.
all suggestions wanted!!