I have a couple that is about to have a new baby and want to sell their rental Property to get the equity out. it is two units and The total rent brings in $1250 and month and the owner pays about $100 for water. It has had a solid rental history for the past 3 years or so. They are asking $90k. I am going to go look at it but I do not know what deal can be done creatively .
Any advice?
sounds a little thin
I like a minimum 1 1/2% per month. At 90,000 it is 1 1/4%. Not bad though, if the rent is ready for an upward adjustment.
Not sure about creative financing. If you have 18K you could get a commercial bank loan for the $72K. If they want out, and have a mortgage, that is probably all you can do.
A great deal would be if you had aquaintances who have large CD’s earning practically nothing. Get them to loan you $90,000 and pay them 8%, interest paid monthly and balloon in 5 years. They will be thrilled with the return and like the security of a 1st mortgage on real estate for the collateral. That way you have monthly cash flow of $550-750 with virtually no out of pocket money. Infinite return on your investment.
Suggest a little more research
Couple of things I’d want to look at hard:
First does your state’s version of SAFE (stupid name for stupid law!) let them sell on carry-back note w/o their being licensed (some states do so require !!! )?
Secondly , what are other features of the prop that would make a great deal for you?
Comps, recent area sales, empties in area, condition of the prop, etc…just look at this deal hard as you should ANY SFR buy.
It doesn’t sound to me like you are including all the owners expenses in the deal so far.
For instance, how much and who pays the property taxes? How much for insurance and what amount do you figure for usual maintenance, upkeep of the property?
I guess I need to do more research. I didnt even think of what you guys are suggesting. I will look more into it.