I have an opportunity to pick up a nice 53 ac hunting ranch as a flip. Here are the details:
I've never done a seller finance deal, I have baked a bit of conservativeness in these numbers on the sell side. Its 4x4 access only for the 1/2 mile but while I wouldn't drive my nice truck if I was worried about brush scratches, any tall clearance vehicle should have no problem accessing the property. The access ROW is deeded and was arbitrated and recorded with the country in 2010.
Has live water at one (the shortest) property line and has abundant white tail, axis and occasional other exotics. There are no high fences on any of the surrounding properties. Has a small hunting cabin that requires a generator, power is close but not to the property. No well is present but they are on other neighboring properties.
It's doesn't have quite enough meat on the bone for my funding partners to work it, but the seller finance does seem to create an opportunity for us. My biggest concern is should I not find a buyer I would have to maintain the debt heading into a potential recession. I'm not terribly concerned about that as we have some reserves we can assign for that. I also feel like worst case I should be able to fire sale the property and break even pretty easily.
What am I missing?
- $2k/ac purchase with seller financing
- 15% or $16k down
- $90k note at 5% over 15 years =$711/m payment, no prepayment penalty
- Comparable property sold Jan 21 after 3 months on market for $3875/ac, puts this deal at $205k value
- We would list the property at $190k or $3578/ac and hope to sell quickly not less that $180k
- Total out of pocket if sold in 6 months, $25k
- Assuming conservative 10% cost on the sell side should net us right about $30k profit, about 150% ROI
I've never done a seller finance deal, I have baked a bit of conservativeness in these numbers on the sell side. Its 4x4 access only for the 1/2 mile but while I wouldn't drive my nice truck if I was worried about brush scratches, any tall clearance vehicle should have no problem accessing the property. The access ROW is deeded and was arbitrated and recorded with the country in 2010.
Has live water at one (the shortest) property line and has abundant white tail, axis and occasional other exotics. There are no high fences on any of the surrounding properties. Has a small hunting cabin that requires a generator, power is close but not to the property. No well is present but they are on other neighboring properties.
It's doesn't have quite enough meat on the bone for my funding partners to work it, but the seller finance does seem to create an opportunity for us. My biggest concern is should I not find a buyer I would have to maintain the debt heading into a potential recession. I'm not terribly concerned about that as we have some reserves we can assign for that. I also feel like worst case I should be able to fire sale the property and break even pretty easily.
What am I missing?
