If you are offered the property at the original purchase price, then the seller may not have much equity in the property. If it was originally purchased at $40K with 95% financing, then the seller’s equity may be under $3000.
How much is still owed on the mortgage? Can you pay cash for the seller’s equity and will the property rent provide positive cash flow after expenses and debt service? If so, purchase the property “subject to” the existing mortgage and offer the seller cash for his equity. Since the seller already has a place to live, he may not need a lump sum cashout for his equity.
Offer to pay his equity in 6 monthly installments of $500 beginning three months after closing. The rent income may be enough to put a significant dent in the first few installment payments.
I’m sure that others will have suggestions for alternate approaches to this deal.
Hello to all,
There just must be a deal here, but I don’t know how to work it!
My brother-in-law has offered us his house at what he paid for it 3.5 years ago. $40,000. It is a 1 huge(can convert it back to 2 pretty easily–if we wanted to) bdr/1bath fenced yard, yadda, yadda, yadda in a pretty nice area of the city. He has moved in with his fiancee who already has a home.
FMV puts it at least at $50,000.
How do I do this no money down and get some cash out at the closing? (You know, to live on and to use for other deals) I am recently self-employed. We have marginal credit and at least $30,000 equity in our home, but do have other debts! (dontchaknow!)
Here is what I am thinking…
90-100% finance the $50,000.
L/O the property to a tenant or just keep it as a rental.
Am I living in a dream-world?
Pleeeeease help me! I am paralyzed here!
Thanks in advance.
Tracy
P.S. We are in St. Louis if that even matters.