Need help working a deal with owner finance property - Posted by Ryan

Posted by Ed Copp (OH) on April 14, 2000 at 16:37:37:

From what little info that I have on this proposal, it sounds like a “no deal, deal” to me. It sounds like you should be able to get a comparable return without putting any money down (or almost none). Figure out what it will cost you to get the 25K. This needs to be penciled into the costs of this deal. I think I would go slow and shop around some more (just my opinion)…ED

Need help working a deal with owner finance property - Posted by Ryan

Posted by Ryan on April 14, 2000 at 13:42:34:

Please Help!

I’m interested in purchasing a 3 unit complex that has owner financing. The only problem is he wants 25K down at closing and the unit is 160K. The rental income coming in from the unit is $1900 a month. How could I structure the deal so I would not have to come to closing with 25K which I can not afford.
If the seller was willing to take a second out on the house and I was to get a loan for 50K would the lenders consider the sellers second the down payment and I would not have to come to closing with anything except closing costs?

Any ideas would be helpful. Thanks in advance!

Re: Need help working a deal with owner finance property - Posted by Joe

Posted by Joe on April 19, 2000 at 11:20:52:


With out all of the details I can’t give you exacts, but here is my take on the situation.

  1. Seller owns the property free & clear, or is into a mortgage for about 20-25K. He either wants to walk with some cash or needs to pay off the mortgage.

  2. You have some cash, but not a lot to get into this property.

Here is a way to structure it:

160,000 purchase price

6,400 approx. closing costs

88,000 1st mortgage with a lender (cash available to seller at closing)

72,000 seller financing

8,000 down payment

6,400 approx. seller paid closing costs (negotiate that if they agree to pay closing costs you may be able to get them more cash than they needed initially)

Bottom line: You get into the property for little cash & the seller gets the cash that it seems like they need. I know this is a little vague, and I don’t know all of the details, but shoot me an e-mail, if you want more information or need a lender.

See if seller will hold 2 notes - Posted by Michael Morrongiello

Posted by Michael Morrongiello on April 14, 2000 at 22:35:31:

I do not have all the #'s on your deal, whether or not the property being sold is free and clear or does the seller owe money against it?, etc.

However assuming it is free and clear of any debt why not approach the seller to hold (2) two notes. A first lien note for $30k+/- that can be sold for cash to generate the $25K cash the seller really wants and then a 2nd lien note that the seller can retain for monthly income.

Michael Morrongiello