A buyer negotiates $837,000 off the asking price, pushing the cap rate from 6.75% to 8.7% on a $2.9M deal. A conventional loan covers 75% of the lower price, and the seller carries the remaining $800,000 for two years, letting the buyer service the note while the deal still works for both sides.
43 seconds it thought on it and came back and said at a 2.9 offer, here's what the economics look like. So the asking, right, going through it made the cap rate at 6.75. By going to 2.9, it makes it an 8.7. We're dropping the price $837,000. And so we're able to get a decent basis points increase. So keep going down. It'll show what we got here. Now we've got the SCR scores that make sense. We can go up to, it looks like a 75% LTV still. Okay. And get ourselves pretty good and situated, right? Because our loan amount will be like $2.1 million. We'll still need to come up with another $800,000 to cover that. And that's where we asked the seller to carry that, right? So like they, here's the thing, people sell property, they go for the most that they can possibly get. They don't try to go less. So if we don't try to go with the best that we can possibly get, it don't make sense. Right. And so on this deal, He's got to take a haircut and it's got to make sense. So if they want to sell it, that's the way they do it right there. And we do a 2-year buyout with them on the owner carry part just to get through the note, and that's it.
