confused and need timely advice

[needhelp]

We are familiar with many creative financing techniques, however, we are stumped with this one!  Here is the situation:

About Us:
We would like to buy a house in NY and we have found a house that we think might work but we are only a few months out of bankruptcy and still working out leftover credit issues.  We cannot get traditional financing because of this.  Bottomline - we need to keep our payments affordable.  As an added thought - we own a house already that we are currently renting out and we would like to continue doing so as best case scenario. 

About Them:
They bought the house for approx $99,000 in the late 90s.  Over the years, the mortgage has increased to approx $250,000.  They were selling for $246,000 approx 6+ months ago and then lowered the price to approx $219,000 around Jan.  We spoke to the realtor who said they just applied for a short sale within the past few weeks and they have received verbal offers at $195,000.  We happen to know the family so we also know they really want out and it might give us some leverage. 

They are working with a realtor, so the deal has to be sweet enough for him also.  What options do we have?  Timing is everything - Thanks in advance!!!

[christopher w]

Unless you can get the seller to owner finance it for you you are most likely out of luck. There is not enough equity in the property to make it attractive to a private investor. In addition to that private or hard money will not be affordable. Because of your recent bankruptcy you will be precluded from regular financing for at least 2 years from the date of discharge.

[needhelp]

Thanks for your reply Christopher.  Of course, I wish the answer was different but if our only option would be to see if the sellers would owner finance - how do you sweeten that for a realtor and do you have any suggestions to sweeten it for the home owner?  Thanks in advance for your time.

[redhawk]

I would look for a house with seller financing of some sort. Not every home is suited for these offers. Any homes offered with a lease option,co-operative assignment or land contract would work. I would ask local landlords for one of the rentals they have and ask if they would finance it for say 7% int with a 5 yr balloon. The sweetener would be a large down payment. You could ask your Realtor for a home like this too. Trying to do one with 0 down would be difficult and time consuming.Minimum I would try is 5% down or you appear to be less than serious.
redhawk