Posted by JohnBoy on April 19, 1999 at 11:21:37:
I assume that since he says he would sell for what he has into it that the property would appraise for more than that. Will the property appraise for 10% more than what he’s willing to sell it for? Have him carry back a second for the 10% and cash him out with 90%.
Write a clause in the second that allows you to cash it out for a discounted price of $1000 within the first year. Or keep the second in place and write up a sales contract for one of the townhomes now that he will owner finance for you and deduct the amount of the second from the sales price.
Actually, see if he would be willing to take 80% of the appraised value of this house and carry back a second for the 20%. You could get a better interest rate on the 80% first and probably get a cheap rate on the second the seller carries. Write up the sale contracts on the townhomes he will be building now with the closing to take place when he finishes the construction on them. Then whatever the difference is between the appraised value Vs. the selling price he’s willing to sell to you for, deduct the difference from the sales price of the townhomes.
The seller gets 80% cash of the actual appraised value on the house and you get 100% financing with a contract already signed on the 3 townhomes once they’re finished. Four new properties for no money down!