Looking for advice how to structure deal - Seller has lost job and looking to sell property


Inspired Forum Member
Came across this seller by making hard calls to FSBO ads.

Seller owns duplex and currently listed FSBO for $278,000. Seller has lost job and has no money. EI may run out in 2 months.

Seller is living on main floor of duplex and rents out the top apartment for $625.00 all inclusive.

Seller owes $60,000 to First Line mortgages and says his mortgage is open with no term - interest is 4%.

Bought house 12 years ago.

Seller is current with mortgage payments and behind $5000 in taxes.

House was listed with realtor back in the fall and evaluated at $290,000.

Seller said his bottom price would be $260,000.

Seller said when everything is paid he wants to walk away with under $200,000.

Mortgage $181.00/week.

Gas $180.00/mth averaged over the year

Hydro $225.00/every 2 months

Taxes $2400.00/year

Fire Ins. $100.00/month

Main floor - redone, one bedroom, one bath, unfinished basement, large fenced-in backyard, garage/workshop with two doors at front and two doors at back of workshop. Could rent for $900-$1000/mth all inclusive - would have to double check. May be the potential to rent garage/workshop separately.

Upper apartment - one bedroom, one bath, needs updating. Currently rented for $625.00 all inclusive.

100 amp service.

Knob and tube wiring remains in the upper apartment.

Cast iron piping going outside for wastewater.

Utilities all under the same roof with no separate meters.

I have not seen the house and told seller I would get back to him.

I am not sure how to go about structuring this deal.

Any suggestions!

Thank you,


Thomas Beyer

Senior Forum Member
REIN Member
Seems to be an unmotivated seller with such a low mortgage. Did you ask him if he would carry a mortgage ? How much cash do you have to buy ? Would he be willing to refi the house with a new mortgage of say $160,000 to pull out a hundred now and $110,000 in two to three years if you do an RTO ?


Inspired Forum Member
Hi Thomas, I ran it by him on the idea of carrying a mortgage and his words were, 'He can't afford the mortgage he's got.' He is concerned that if he was to refinance, the bank would turn him down without a working income.
If he was to agree to your suggestion of refinancing and pulling out a hundred now and $110,000 in 2-3 years - what kind of offer would you make on the place.

And my cash is limited.



Inspired Forum Member
REIN Member
Hi Linda

I think Thomas referral to 'carry a mortgage' was whether he would take back a second (VTB) for a substantial amount, say $100k.

You would have to source a first for say $140k, and have say $25k for down and closing costs - leaving aside the renos.

Does the 'evalation' factor in the cost of reno's especially the knob and tube - this is major red flag. Was this a professional appraisal or the RE agent's suggested ask? Is there an inspection report available?

Otherwise I think the discount is is too small and he will not get his $200k out. The flippers look for something in the order of a 25-30% discount from the renovated value, less the cost of those renovations - use this as a guide.

Check yourself whether it fits your investment criteria, fundamentals, and target area, or are you attracted by a potential deal?


Inspired Forum Member
Hi Brad, I wondered also about the evaluation done on the property. I don't believe it was a professional appraisal. There was no inspection report.

I was attracted to the deal to come up with a solution that would work for the seller and to make a slight profit on a tenant locator fee.

Originally when I spoke with the owner he seemed quite motivated to sell his house, get out of debt, find a place to rent, find another job until we started talking numbers. I was looking at possible options - Rent to Own, doing a wrap on the existing mortgage, locating a renter for the main floor, renting out the garage, Equity Partnering.

I ran this scenario by another investor and his response was 'no deal - seller wasn't motivated enough.'

It turns out the common-law couple has decided to approach another 'We Buy Houses' company who is accredited with the Better Business Bureau.

Thanks for all your suggestions.