My idea is as follows(and I would like some constructive criticism from those in the know) I obviously don;t have much know-how as yet and appreciate all advice given. We are wanting to buy a property to redevelop. We buy the property with a $20K deposit. This is paid to the seller, with the balance(approx $250K) of the purchase price owing within1 year to the seller(effectively like a loan of the balance, instead of the bank loaning it to us). I think the seller has no plans to use the money for anything right now. The property deeds should be transferred to us after paying the deposit and settlement period has elapsed(as the sale price would be $20K deposit and $250 approx balance owing in 1 year ) We have a normal settlement period of 1 month. We pay the seller a certain amount of interest each month until the debt has been paid in full within the year or timeframe specified. This interest rate would be more than the rate a bank would offer to make it attractive to the seller. It would obviously be fairly substantial – about equivalent to an extra $15K in a year, above the asking price of the property).. All debts should be paid in full within the specified period(1 year) or earlier. If we repay the debt earlier, (I,e within 3 months or so), then we have a clause that the seller would be paid an additional monetary amount so they feel they have gotten something out of the deal too. I obviously have to sweeten the deal, as I want them to sell to me, rather than someone else who would pay all of it now with no hassles and no ridiculous funding strategies. I plan to redevelop the property and resell. What additional amount would be a good enough deal sweetner? Has anyone done this type of deal before? What are the pitfalls, how do people feel about being approached with this type of deal(maybe any real estate agents might know)? Of course it would all be done with solicitors etc which I would pay for. I am sure they won’t go for it, but maybe worth a try? Would the real estate agent laugh if I suggested this? I think I have read something a little similar ot this in a book once before many years ago. The problem is that I do not think there will be any problem for the seller in selling the property, and so really need to offer them something they cannot resist I suppose to make it worth their while. Any suggestions out there, or am I a total nutter as my other half seems to think when I suggested it to him. Be nice with your comments – I am trying to be creative here and avoid the bank……….
I posted this in the wrong section I think – so have reposted in the finance section.
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