Real Estate Investors can easily get a seller to take a 10 to 20% discount by using the cost-to-sell guidelines, showing the seller what they might net by selling their house traditionally. This is done by subtracting all selling expenses (realtor commission, closing costs, holding costs, maintenance and home inspection “gotcha’s,” etc.) from their asking price. Sometimes you can get them to go even a little lower by asking if it’s okay if you made a small profit on the deal (Hey, you’re a real estate investor and you have to put food on the table too, right?). Then lower again if you take the property ‘as is.’ And even lower if you give them some or all of their equity in cash now instead of later.

If you can reasonably estimate the price you can sell the house by offering owner financing or a lease option to your buyer, you can then calculate the maximum allowable price you can pay the seller. If you can buy at a discount with owner financing, and keep that financing in place and sell at a premium, there should be little difficulty creating a 15 to 25% equity spread. But remember, holding for years rather than months is where you begin to build wealth.