Help structuring deal - long - Posted by LeBaron (KS)

Posted by LeBaron (KS) on May 03, 1999 at 23:19:29:

I might have myself my first deal. Here are the particulars surrounding it.

I have a buyer who wants to get into a house and has $2500 to use as down payment and can afford $550 per month payments. Now I have found a home that has an assumable FHA mortgage on it. The house is in excellent shape and the seller is asking $64,000. He has moved out of the house and I apologize but I didn’t really get his immediate monetary needs. I know…shame on me. I have put together 3 offers that I think can tie this house up and I can pass on to my buyer under his terms. Please look over and evalute these offers and any and all advice is welcomed

Offer #1:
I ask to assume the FHA mortgage with an assumption fee of $500 to the seller.

I ask the seller to carry back a second mortgage for $30,000 ($2,000 less than his asking equity) with payments of $200 per month until the mortgage is paid off.

Seller pays closing cost.

I then turn around and have my buyer pay a $2500 assumption fee and he takes over the deal with the terms and assumption mentioned above. I know I don’t make but $2,000 on this deal.

Offer #2:
I ask the seller to lease option the house to me with the right to sublet for a $500 consideration.

The lease is for 4 years with payments of $500 per month and option to buy for full price of $64,000.

I then sublet to my buyer for $2500 consideration fee and lease for 4 years with payments of $550 per month and option to buy for $74,000. Obviously I make quite a bit more money this way.

Option #3:
I ask the seller to option the house to me for 60 days for a $500 consideration with the option to buy for $49000. Much less than he is asking.

During the 60 days I work to get my buyer financing for $59000 knowing that he has $2500 to use as a down payment.

These are the 3 offers I have come up with that I believe I can make it so everyone wins. The seller gets his money, either by waiting a little while or cashing out but at a lower price, my buyer gets into a house under the terms that fit his budget, and I realize some sort of profit.

Please evaluate and advise because I am very green and want to be sure I am headed down the right track. Thank you in advance for any and all help!

LeBaron (KS)