Need some Sub2 deal structure advice… - Posted by Charity
Posted by Charity on September 06, 2003 at 20:45:07:
Hi everyone! We are working on our third deal in 3 months and we are a bit confused on this one. We have several options of how to structure this one and just are not sure what the best way is. We have very flexible sellers who are wanting to work with us and are not desperate, but they are very realistic and ready to go on this.
The house is in A++ condition and is an executive home (5BR on basement). Worth about $230K tops. They owe $230K. They are willing to give us $25K up front, but they are worried that we won’t get it sold and they will somehow end up with the payments and be out the $25K anyway. I can understand that concern. So, they had asked if they could pay $15K now and the other $10K when we cashed them out. We are concerned because they’ve been trying to sell for 9 months (tons of showings, no offers and mostly FSBO) and the payments are around $1300. So we want enough cushion to cover ourselves.
Tonight they asked if maybe they could pay the first 2-3 payments (as we normally require) and then continue payments after we close until we find a buyer BUT deduct those payments from the $25K they plan to give us. Once we get a lease purchaser in the home paying the payments, they will give us the remainder of the $25K.
I guess I am asking opinions here. What would you do? I feel we can get someone in this house, but I don’t want to eat up all the profit trying and then not make a dime. Any ideas?