Posted by Laure on May 25, 2000 at 24:53:27:
If you offer seller financing, you can add another 5k to the sale price. I offer owner financing in my ad in the paper. I interview on the phone. Ask them why they want owner financing. What problems they have. How long ago were the problems. Are they resolved yet. I am finding that most buyers “think” their credit stinks. When I find someone who isn’t that bad, but they think they are, I show them the house and get a signed offer from them. Then I take them to my broker. Most times, if I have done my interviews well, they will finance right there on the spot, and I have just made an extra 5k ! Sometimes I am giving them 6 months or a year on a L/O, if they just need a little time to finish fixing some problems. But I know that going in to the L/O. I also get 3k down as option money from them at the time we sign the option. So, IF they don’t repair their credit problems, I add 3k to my profit, reduce my holding costs, and sell the house again. It’s much nicer to have a cash buyer right off the bat, but those darned cash buyers can be more difficult to deal with.
I have a house I bought last May. I really planned to just sell right out of the house. I put on a new roof, carpeted it, added ceiling fans, and gutted the bathroom. Paid 40k, rehab 4k. Lady L/O’d it. Put down 2500.00. 7 months later she walked from the deal and “asked” to be let out of her lease. She forfeited her 2500.00 (Bill Bronchick’s forms) I found a new buyer. 5k down, and he is approved for a loan in 3 months. oooohhh almost forgot. I sold it to him for 5k more than her ! Sale price is 59,900, and I am giving him a 2500.00 allowance for a new furnace.
So, that’s how I make more money on my rehabs. Patience is the key factor.