need help

[Ganjier]

So lets say 10 acres with a home and metal building the seller is asking 329k.
I want to put down 200k, and the owner will finance the remainder.
What would be the best seller finance agreement you can come up with?
I have crunched some numbers, just looking for insight.
My numbers below.
offer 285k
down payment of 200k
finance through seller 100k @ 5% over 10 years.
I wind up paying 23k in interest so 123k plus the offer of 285k puts the seller at 308k.
Just looking for a deal for me and also a motivated seller.
Thanks.

 

[oldfogey8]

If I were the seller, I would flat out reject your offer unless I was desperate to sell it. Your offer is about 15% under asking, the seller is holding an unsecured note and the interest rate is below both going rates and inflation. The seller loses on all three key metrics of the deal. The real estate market where I live I really hot. Every piece of property is selling for over asking in my area. A lot of that is driven by institutional investors buying with cash and ‘cash is king’ in any sale. Assuming you down payment number is fixed by your cash on hand, I think you would need to sweeten the pot by offering an interest rate higher than lenders are offering to give them a ‘win’. Not knowing anything about the ‘temperature’ of the real estate market where this property is puts me at a disadvantage but I would look at sales figures of comparable properties in the area and rework your numbers based on ‘comps’ so that you get the seller to counter your offer. I am not trying to burst your bubble. I am married to a real estate agent and she is working with a buyer right now that has lost out on about 20 properties in the last 6 months due to scenarios where even though his offers were at or above asking, his terms were not as good as others.

 

[user 60570]

good advice from oldfogey8

if the seller is motivated to sell , go for it , all they can do is say no

if the seller says no , do you have a counter offer?

 

[SubmarineGirl]

It won’t hurt to ask, maybe someone that want to unload it but 300 sounds like an offer closer to what the seller really wants. Have you checked the area what this type of parcel is going for? Sometimes that helps having a list of lower priced properties…

 

[pute]

So lets say 10 acres with a home and metal building the seller is asking 329k.
I want to put down 200k, and the owner will finance the remainder.
What would be the best seller finance agreement you can come up with?
I have crunched some numbers, just looking for insight.
My numbers below.
offer 285k
down payment of 200k
finance through seller 100k @ 5% over 10 years.
I wind up paying 23k in interest so 123k plus the offer of 285k puts the seller at 308k.
Just looking for a deal for me and also a motivated seller.
Thanks.

Good luck. Unless that house is way over priced the seller will probably laugh at you. If the house is priced right he might entertain selling at full price, accept your $200,000 down and carry the Ballance at 2% over prime with an interest only loan on a five or 10 year balloon.


I have done several loans like that in the past.

 

[Ganjier]

We went and looked at the property today. Trailer needs a lot of work. Possible roof repair, flooring is soft in a few places. A/C does not blow very well so I am guessing there is a leak in the ducting somewhere since it is a kind of newer unit.
Also, the trailer has been moved from it's original location so no lenders here will finance on this property.
The owner either needs someone to come up with cash or finance it themselves. It has also been on the market since January 2023.
I crunched some numbers here. What do you think?

Still offer $285k
Put $200k down which is 70%
Finance $85k with the homeowner @5% over 5 years. No balloon payment.

$11,200 would be the interest so I would ultimately wind up paying $296,200 which isnt that far off with a 70% deposit.
Priced at $329k I am guessing the owner wants $300 minimum, At $296,000 I am only $4,000 off.
Does that seem reasonable?

Right now I am paying a total of $7,520 per month for my current mortgage and my work shop.
This deal would put me at $1,887.00 per month which is a saving of $5,633 per month.

 

[pute]

Hoping the best.

 

[Ganjier]

Wondering how long I should wait before I make an offer.

 

[oldfogey8]

Personally, I would look at it like this. Do I want this property and do I care what the interest cost is to me? The seller is likely looking at cashing out as quickly as possible. 5 years is twice as good(if not better) than 10 years. The caveat is his assurance that you will make the payments and if he doesn’t know you from Adam, that is a big caveat. I would want collateral of some sort(like your business capital equipment). My gut says you are not buying the trailer. You are buying the property. The little repairs are something you could use as leverage but they likely pale in comparison to the value of the big picture. I would ask myself again how much better would my life be here vs where I am at without looking at the cost savings. Would you do an even swap for where you are for owning this property? Sounds to me like it would be a big upgrade and saving even half of your current calculation would be great(and you could use the savings to repair the problems in a month or less). Bottom line for me is always: better life is way greater than any money. I am an old fart though. Just my view looking at things in the rear view mirror so to speak.

 

[Ganjier]

Personally, I would look at it like this. Do I want this property and do I care what the interest cost is to me? The seller is likely looking at cashing out as quickly as possible. 5 years is twice as good(if not better) than 10 years. The caveat is his assurance that you will make the payments and if he doesn’t know you from Adam, that is a big caveat. I would want collateral of some sort(like your business capital equipment). My gut says you are not buying the trailer. You are buying the property. The little repairs are something you could use as leverage but they likely pale in comparison to the value of the big picture. I would ask myself again how much better would my life be here vs where I am at without looking at the cost savings. Would you do an even swap for where you are for owning this property? Sounds to me like it would be a big upgrade and saving even half of your current calculation would be great(and you could use the savings to repair the problems in a month or less). Bottom line for me is always: better life is way greater than any money. I am an old fart though. Just my view looking at things in the rear view mirror so to speak.

This is why I posted this. I always want to hear from a different perspective. I agree with wanting the property being important. I also am crunching numbers to make sure we will be saving money in the process. The toughest part will be the transition since it is moving not just my home, but shop almost 5 hours away. Thank you all for your insight.

 

[Lesso]

Would you still be on the same coast just further south?

 

[Ganjier]

Would you still be on the same coast just further souIll be up near Lake City ish aread.

No, the plan is north central, north west area. Where the wild things are, LOL.

 

[Lesso]

Ok up by the state line. My in-laws have a place in molina

 

[Ganjier]

Welp we put an offer in tonight. Fingers crossed.

 

[Ganjier]

Got a counter offer. Negotiating now. let's seeeee!

 

[pute]

Got a counter offer. Negotiating now. let's seeeee!

Make it fun.... don't get stressed.

 

[Ganjier]

Make it fun.... don't get stressed.

We came to an agreement.

 

[pute]

We came to an agreement.

Happy for ya. Probably should have an attorney review the contract.

 

[Ganjier]

Happy for ya. Probably should have an attorney review the contract.

You know it.

 

[user 60570]

Congratulations!