newbie with a partnering question

[brendar]

hi from a Texas newbie all.  anyone want to tackle/comment on my situation?  

I have a friend who wants to buy the duplex he's rented for 3 years...he has a great relationship with the owners (who want to sell it to him), and we are partnering up to buy it since I have the cash for a down payment, at a price of 100K.  He is working on setting up owner financing for us; he thinks that we will need at least 5% down payment, maybe 10.  We are trying to come up with an equitable way to have equal ownership; and he thinks that bringing his realtor friend on board to do the deal at only 1% commission is worth the 5% difference that we will "save" on the deal (assuming a realtor charges 6%).  I.E. I come up with $10,000 down payment and he's saying his realtor connections and position with the owners is worth $5,000...   We both agree that as he's a professional carpenter and all around excellent handy-man that he can log his hours and earn sweat equity for some of his part (it's a 60 year old house)...

I mean, the seller is the one who pays the realtor fee if they listed the house.  I think he's using the realtor friend to actually do the closing for us...anyone have an idea of a fair estimate of what he's bringing to the table?  

Also, how much down payment is expected with owner finance?  I would like to put down as little as possible!  Many Thanks   Brenda

[Dave T]

You say it is a duplex, but you don't mention what you will do with the second unit.  Could your friend be only purchasing one side of a duplex?

[brendar]

oh, sorry...I will be moving into the other side (actually, it's one on top of the other; looks like a single family dwelling from the street but has seperate utilities) -- it's a nice house in a great area with a garage apartment in back with a solid renter paying $400/mo.

so we are not splitting it; just buying it together (hopefully!)

[tone]

Hey,

Well not that I am that I know to much about this.  But would it be possible for you all to get a mortgage for 80-90% of the price and then have the seller hold back (PM Mortgage) the 20-10% for the downpayment.  That way they Seller gets 80-90% of his money from the mortgage company and then only has a 20-10% PM against it.  Meaning that you pay the seller the majority of the money with the Mortgage money and you only owe the Seller the 20-10%  thus creating a no-money down situation.  Instead of you putting out any money from your pocket.

Just an Idea.

Tone
(Tone is not liable for any of the information that is said or given in his behalf.)

[brendar]

thanks so much Tony for the idea...i have a broker shopping around for a zero down mortgage now...might be simpler even than your idea...

[niravmd]

if you already know the owners, why are you paying a realtor?

hire a realtor and pay him 2k to do your paperwork and ask the sellers to knock off 5k. i sold my house to a friend. i asked a mrtg broker which escrow company he liked. i used his referral and they handled all the paperwork for $600. even sent the buyer all the disclosures and stuff.