Posted by David Butler on January 04, 2001 at 19:18:09:
Hello Jimmy,
Hey, sounds like you might have something to work with. Before discussing the deal structure though, I want to strongly recommend that you be sure you have the operating history down on that property (APOD) - broker should have that right in his file??? Also, you don’t mention property value, or cap rate for similar properties in the area, which are all things you’ll want to know before making bids on properties. Always run your numbers ahead of time - then verify the due diligence to support those numbers once you have a deal in hand, before closing.
You may or may not want to use seller financing, but my guess is with that small of a down payment, that’s your best chance for putting together a deal that works the way you want it too. But first things first… find out what the Seller’s motivation is, and what he needs in cash out of the deal. Most sellers need little or no cash out in a great many investment property deals - they just don’t know any better. But you can’t work with his needs unless you know what they truly are.
You might want to have a look at a thread I did last nite for a real estate broker out in Indiana, (Market Conditions?!, Darrell Powers, Jan-03-01, 09:20 PM) at: http://www.notenetwork.com/cgi-bin/dcforum/dcboard.cgi?az=show_thread&om=362&forum=DCForumID2&omm=3
Also, you may find your deal structuring efforts regarding sellers to be somewhat enhanced by reviewing the articles in the ANN UPDATE ON REAL ESTATE NEWSLETTER, issue #4, at:
These should give you some ideas on the possibilities. We need a lot more information to structure this deal, but you need to find out what the sellers thinking is first… so read this reference material, sort somethings out on that property, and then lets see what makes some sense.
Hope this helps, and best of luck!
David P. Butler