Ok, I just got done with a long negotiating session with the seller. Here is where we are at. Seller can go as little as 17,500 down, 200 per month, 5-year balloon for the balance of his equity (Who said anything about interest? - 0% so far). Seller wants near market value for the house. He's asking 270-275k (comps top out around 300k). He owes 129,000 with monthly payments of $650 (P&I only), which I would be taking subject-to and he agrees and is willing to do this.
What do you think?
Note, that he also has some cool "Stuff". He spent 18,000 on a home theatre 90" projection tv with sound system. He'll leave it if we pay him 280k for the house (in accordance with all the previous terms).
The sellers plan on using the 17.5k down payment for a down payment on their new condo. They will need to stay in the property until this is built. This may get a little hairy for me if I have to give them 17.5k down (from a private lender) and let them live in the place (they will be making mortgage payments, however).
So far so good on the negotiation. I like a number of things you have done. The zero interest, the subject to and the possibility of the home entertainment center!! How much can you get the house if you don't get the home theater system?? Some other thoughts:
1. I don't like giving them 17k and they stay in the house. The argument is they wouldn't get that deal anywhere. Have them sign a contract with you but then they go get a bridge loan to get the 17k for starting the condo. I would not give them 17k and then they stay in the house.
2. The balloon is a bit short for me, I would prefer 7 years. If you can get it, go for it.
3. I think you will have great cash flow on this deal. And I am okay with paying full price when you get 0% interest financing. Especially since you get his loan subject to. Overall, great deal, make those adjustments and I think you have a really strong contender for deal of the year.