Get low LTV financing for your buyer - Posted by Monique
Posted by Monique on January 24, 2001 at 16:31:13:
If you have a little bit of time and your option is not due to expire tomorrow, I recommend you try to get your tenant qualified to buy it from you, as Charles Suggested.
You can tell your tenant that if they are willing to operate quickly, you will help them buy the property in the next 30 days. If you sell your tenant the property at $40,000 then they can likely qualify for a low LTV loan. Even if their credit is shaky, they should be able to get a loan from almost any lender at 65% LTV, or $26,000 – maybe even a Low or No Doc loan. If they have as little as $900 to put as a down payment (try to get as much as you can, obviously), then you can purchase the property from your seller with the $26,900 cash. Then, you hold a note for the difference – $13,100 if they only have $900.
The obvious win for your tenant is that they get to be owners and not renters for very little money down. Your seller gets his/her price from you all cash. And you get a nice cash flow coming in off the 2nd mortgage that you hold.