so, if I read this right, this guy has only come down 2500 from his initial asking price, and then to top it off wants 20% down on a 5 year balloon, even though he behind on taxes (and who knows what else?) Beat this guy up more, way more. Remember, price or terms. He can have one or the other, but not both. If he insists on both, he’s not motivated, so no point talking to him, move on. Since it is a FSBO, I’d make multiple offers, maybe $80k (balance due on notes) with 30 day closing and 5-10% down (still not a really great deal, but ok) or full price, 0% down, 5% interest. He balks at the interest, tell him it’s the same a bank gets if they make loans at 10%, and pay their depositors 5%. Do due diligence - this guy is probably behind on more than taxes.
Yet another newbie seeking the voice of experience - Posted by BRoss (TN)
Posted by BRoss (TN) on March 23, 2000 at 22:55:53:
I am looking to purchase 2-3 houses in the next 3 months (one for a personal residence) and have come across a FSBO down the road from where I rent. It is an interesting situation but I will try to keep it to just the numbers.
FMV=90-93k (rural but desirable area, comps are nearly non-existant)
Ask=86,500
Current price=84k
1st Mortgage=59k 10.5% & $543 pymt
2nd Mortgage=13k 8.5% & $192 pymt
3rd Mortgage=8k 8%, no pymt, balloon on sale(same family member who holds 2nd)
taxes are behind $463
The family member who holds the 2nd and 3rd may consider taking back a note or financing. For financing he wants 20% down with a 5yr balloon though. I can qualify for an 80% bank loan with 1 pt and 8.125%. So I don’t see much advantage in him financing it. The loan does not allow a second if the total notes are over 80% of sales price.
I am restricted on my bank loan choices due to requiring no income varification (sp?) because I changed to a partner with commisions rather than salary 1st of the year.
I am considering offering 85k with 2500 closing cost credit.
This may sound odd but I don’t like the idea of just doing this the “normal” way. It is in the area that my wife would like to be in so I would like to purchase the house, but I am looking for some way to minimize my down payment or monthly payments. I can afford both but that doesn’t mean I want to! I would have up to 2-3 months before change of possession if I decided to turn it into a L/O or wrap. It does not need any repairs and very little cosmetics so it is not a rehab type property to flip either.
I am open to any suggestions you might have to “sweeten” this deal any and thank you in advance for reading this whole note!