Need Your Ideas On How To Finance My First Deal
Hello,
I am working on my first real estate investment deal and I need some help understanding how to finance it.
I have a seller who needs to sell fast because she is moving to another state for a job.
Her house was on the market for $127,400 but it was not selling because it needs some cosmetic work—paint, carpet, some window work, etc. However, it does have a new roof and new siding. Because the house was not selling, the owner took it off the market. Other houses in the same neighborhood are selling in the $130-150k range.
The owner told me she wants to get $20k out of the property and she has an existing mortgage of $78,500. So, she would be willing to sell it to me for $98,500.
My objective with the property would be to fix it up and sell it.
I have two questions:
1. Does this sound like a good deal?
2. If this does sound like a good deal, what is the best way to finance it?
My idea is to assume the existing mortgage (subject to) and use a hard lender for the $20k she wants. I would finance the house repairs on my credit card. My real estate agent would sell it for a 5% commission. So, if I spent around $7k to fix it up, I estimate I would earn around $14k after my agent’s commission.
Is there a better way to creatively finance this deal?
Also, am I thinking correctly on how to finance this deal? I have been reading real estate books like crazy but I am still kind of fuzzy on how the financing end of things works.
Any advice from you experts would be most appreciated!
Peter
My only suggestion would be to see if she would be willing to carry a note for 20K, with payoff anticipated at closing in "x" months.
Good Luck, it sounds like a good deal!
Seller could also pull the 20k out in equity...you pick it up on lease purchase contract for the amount of mortgage and payments.
No money down......$10 to secure contract anyway....