A seller wants 8% interest and might finance in second position. Don't overpay above asking because your lender's appraisal sets what you can borrow, and you'd cover the gap. Structure the seller into second position at or near asking price instead.
8% interest rate.
10% over asking (cannot go this high due to appraisal concerns).
About 1% above asking.
I mean, what I would do is I would go back and say, okay, he's looking for 8% interest rate. That's why I said that, because it sounds like a seller who knows his way around structuring a deal and real estate. So I'm not going to beat around the bush on that one. I can't go 10% over asking because I have to make sure the property appraises to value. And so the lender is going to do an appraisal and I have to go off that appraisal value because if it doesn't appraise to what he's asking, it's going to come out, you know, I'm going to have to cover the difference. So assuming he was open to being in second position or not in first position, would need to get him structured to something that's at asking price or a little bit more if we think the property can actually appraise for more. In this case, if the property is in pretty good condition, it probably could appraise a little bit above asking, but not 10%, maybe 1% or something like that.
