- Joined
- Sep 3, 2007
- Messages
- 39
I am currently negotiating an offer on a single family house that has a price tag of $750,000. Obviously, this is not your fixer upper.
I have purchased many properties in past but I`ve never gone into this price range for a single unit. The upside is that the seller is willing to take less than the value on the property tax roll. Based on comps, my guess is that he`s under-valued the property by about $100,000 based on current conditions. My plan would be to hold onto it until the market swings up and then cash in.
My concern in buying this property is that if I go with a conventional mortgage, I would tie up a lot of resources.
I`m not sure of the seller`s level of motivation (I think "Chicken Little" has gotten a hold of him) but I understand that he`s in the oil industry in Alberta and is concerned with the royalty review issue and wants to cash out before the market slips further down. The realtor says that the guy likes the house but just wants to get his money out. This perspective would be supported by the seller`s statements that he wants to remain living in the house as a renter after he sells.
So, I thought I`d get some thoughts on creative offers from you folks out there in REIN land. My realtor (a highly ethical guy who teaches realtors) suggested that I offer the seller his asking price and do the usual closing but, because the seller wants to live in the house, get him to pay a full year`s rent up front. Rent would have to be in excess of $4,000 per month to cover mortgage, taxes, etc.
If you have any other thoughts, ideas or suggestions on deal structuring, please let me know.
Thanks, Ken
I have purchased many properties in past but I`ve never gone into this price range for a single unit. The upside is that the seller is willing to take less than the value on the property tax roll. Based on comps, my guess is that he`s under-valued the property by about $100,000 based on current conditions. My plan would be to hold onto it until the market swings up and then cash in.
My concern in buying this property is that if I go with a conventional mortgage, I would tie up a lot of resources.
I`m not sure of the seller`s level of motivation (I think "Chicken Little" has gotten a hold of him) but I understand that he`s in the oil industry in Alberta and is concerned with the royalty review issue and wants to cash out before the market slips further down. The realtor says that the guy likes the house but just wants to get his money out. This perspective would be supported by the seller`s statements that he wants to remain living in the house as a renter after he sells.
So, I thought I`d get some thoughts on creative offers from you folks out there in REIN land. My realtor (a highly ethical guy who teaches realtors) suggested that I offer the seller his asking price and do the usual closing but, because the seller wants to live in the house, get him to pay a full year`s rent up front. Rent would have to be in excess of $4,000 per month to cover mortgage, taxes, etc.
If you have any other thoughts, ideas or suggestions on deal structuring, please let me know.
Thanks, Ken