Posted by Sean on March 16, 2005 at 09:10:14:
Find a cash partner, offer them half the profit.
Possible First Deal - Posted by SRQ
Posted by SRQ on March 16, 2005 at 09:03:40:
I may have my first deal and would love some advise. The comps for the house come in at 170,000. I can buy it for 130,000. The trick is how to finance it. The mortgage is about 40K and the seller wants to be cashed out to purchase a new house. I don’t want to go to a bank and don’t want to pay cash so what are my choices? Thanks in advance.
Re: Possible First Deal - Posted by Randy (SD)
Posted by Randy (SD) on March 16, 2005 at 15:15:18:
Your “deal” is not unlike 98% of the deals we run across everyday, you have a somewhat motivated seller and that they’re willing to accept less than fair market value, however not too motivated because they want cash. So what are your options (assuming you don’t have the cash)?
Go to a bank or mortgage company (qualifications required).
Find a private investor/money partner to loan you the money (possibly for a share of the deal).
Hard moneylender (not likely in this scenario because you’re over 65% LTV-$110,500).
Create a seller financed note and sell the note on the secondary market. (Just because someone agrees to sell with owner financing does not mean they have to settle for payments for X years, they can sell their note today for cash).
Depending on your seller’s motivation and your ability to “tell your story” the note sale transaction may be the solution they’re looking for. J.P. Vaughan wrote an article titled “how to create your own mortgage” available here: http://www.creonline.com/articles/art-013.html
the pay price or cash out for the note is dependent on several factors, the LTV, payors credit and down payment etc. rather its owner occupied or non owner occupied and the type and location of the property. You can even get a commitment in advance so the seller knows exactly what they’re receiving for their note.