If they have a loan, I want to take that over subject to, If its a nice low interest rate, I try to keep the property if it does not need a lot of work. What I want to do is get the owner to hold their equity in a 2nd. This way you can get in light and stay in light, I look to keep those, Anything that will not let me get my money back gets flipped- unless I have a partner who wants to stay in and get a good return for their money,
Remember the term,the time value of money. The longer they are willing to wait for their money, the more they get. If its all cash, its always 70% of arv minus repairs. Remember you have a lot of other expenses other than repairs. If they are willing to owner finance forever and I dont have to fix a lot or make up a lot of backpayments, I dont even need equity.
When negotiating their equity,and you are dealing with the owner, you can do almost anything. Thats why I dont like dealing with realtors. Once you find out what their problems are, you can work on them and be very creative. How about a lump sum payment in 10 years for their retirement? How about a lump sum payment when their child graduates from high school and they need a college fund?
Thinking outside the box will get you money.
