Posted by JohnWe (NoCA) on June 09, 2000 at 21:21:15:
Here’s one scenario that might work.
See if the guy will take $45K. If so, his equity will by $11K. A quick way to get around interest payments is to offer say, “I’ll pay you $110 for 100 months”. It doesn’t really matter what the terms are as you’ll soon see.
Then, sell it on a wrap for $55K owner financing, with 20% down. This is $11K, which you will use to pay off the seller. The balance to be financed is $44K at 11% interest for 30 yrs. The payment to you would be $419.
This would leave you a negative cash flow of $3 a month, but at the end of 20 years, you collect the full $419.02 per month for another 10 years (the underlying loan will be paid off).
Something to think about.
Of course you could just rent it out. If the guy goes for $45K, and the $110 a month for 100 months, then your total payment is $522. If you could rent it for $622, that’s about $100 / mo cash flow, but you have to watch out for unseen expenses, plus all the other fun stuff that goes with landlording.