bbrunelleb 0 Report post Posted May 18, 2006 Hi All, Have a seller that will do a CA on a 359k FMV house. The house is brand new, never lived in. He says he will finance 20% with seller finance. When I have a T/B I will be asking 377,800k. That breaks.down like this: FMV $359k to seller+10,800 rent credits @ 900 per mo.x 12+ $8,000 Option Money Total $377,800 = purchase price to T/B I have never had a seller finance before and I'm really confused as to how I would put this to the buyer. I seems like it should be easy to explain but I must be having a senior moment and need some help.. I know to tell the buyer that his rent credit and option money will be credited towards tthe purchase price but the 20% seller finance has got me stumped. I realize that I am out of the loop once I assign to the buyer but I am sure they will ask me how the 20% seller financing will work. Bill Share this post Link to post Share on other sites
MichaelC 160 Report post Posted May 18, 2006 Bill, I'm not sure if the seller is willing to carry a second of 20%, or if he will finance the property if the buyer puts down 20%. Can you clarify? Maybe I'm the one with the senior moment? Share this post Link to post Share on other sites
bbrunelleb 0 Report post Posted May 18, 2006 Bill, I'm not sure if the seller is willing to carry a second of 20%, or if he will finance the property if the buyer puts down 20%. Can you clarify? Maybe I'm the one with the senior moment? Mike, I think what I mean is that the seller will take back financing of 20%, which would be the down payment. Hes a builder and has 3 or 4 more houses he will give me if I can get this one sold for him. Heres the answer to my email that I sent to him.... [ Yes, I would agree to a lease to buy program.Your buyer could also benefit from my owner 20% financing.Please let me know. Florian Yep!, Thats his first name Share this post Link to post Share on other sites
MichaelC 160 Report post Posted May 18, 2006 It's still not clear to me what he means. If it were me I would first ask him to clarify. Once he does, now you know exactly what you have to offer the t/b. "Good news, Joe and Mary! The owner is willing to offer seller financing if you show him some fiscal responsibility over the course of the lease. In other words, guys, make your payments on time, take care of the property as if it's your own, and he can make it very easy for you to to buy it".Something along those lines can only help your marketing of the property, Bill. Share this post Link to post Share on other sites
bbrunelleb 0 Report post Posted May 18, 2006 Bill, I'm not sure if the seller is willing to carry a second of 20%, or if he will finance the property if the buyer puts down 20%. Can you clarify? Maybe I'm the one with the senior moment? Mike, I think what I mean is that the seller will take back financing of 20%, which would be the down payment. Hes a builder and has 3 or 4 more houses he will give me if I can get this one sold for him. Heres the answer to my email that I sent to him.... [ Yes, I would agree to a lease to buy program.Your buyer could also benefit from my owner 20% financing.Please let me know. Florian Yep!, Thats his first name Ok, Thats what I'll do. Find out exactly what he means. Whatever he means, I will get the deal one way or the other. As usual, I appreciate all your help. I'm meeting him tommorrow and will keep you posted. Bill Share this post Link to post Share on other sites
Doug Pretorius (ON) 9 Report post Posted May 20, 2006 It sounds to me like he's offering to take back a 2nd for 20% of the purchase price when it comes time for the T/B to buy. But you definitely need to find out for sure if that's what he means. If that is what he means than I'm with MC, it will be a VERY easy sell to your buyer just exactly the way MC put it. Share this post Link to post Share on other sites
shawnhquick 0 Report post Posted May 20, 2006 Hey Guys,What about creating a seller financed note? The buyer has the option to either carry the mortgage or sell it at a discount to our investors at the closing table? The buyer gets the property, the seller gets the bulk of the $$ now, (and we all know the time value of $$) . Just posted a new topic on Creative Strategy to Buy, Sell, and Flip Property Shawn Quick/Easy Private MortgageContact me at 410-671-4569 Share this post Link to post Share on other sites
Doug Pretorius (ON) 9 Report post Posted May 21, 2006 quicks, I find that sellers in my area are no more likely to take a discount then they are to do a lease purchase. And all of the private mortgage investors I've seen require more down payment, better credit, and higher interest rates than the equivilent that I charge on my RTOs. That adds up to a much tougher sell. Considering it's as hard as it is in this market (and I can only speak to my own market) to find interested sellers with acceptable deals, the last thing I want to do is make it hard on the selling side too. Buuut... if you can prove to me that the notes you buy are comparable to the RTOs I set up then I might be persuaded to try the discount note angle in place of CAs. Share this post Link to post Share on other sites
EQUITY NOTES 0 Report post Posted June 10, 2006 Hi Quicks I have flipped a few notes without putting any money in, basically let the t/b make some payments, maybe 12 or to end of option whichever comes first. You then quote for the seller finance note with the interest and terms seller wants on note. I have done a thirty year note at 7% due in 5yrs. This means the note investor will buy 60 months of payments and usually one half of the balloon due upfront. This gives seller pretty much of all cash he need to rehab or start another property. He would receive the other half of the balloon payment when buyer refies on 59th monthdiscount is low if credit score is ok and other items om property check out. Really a good way to help seller move property at end of lease term and make yourself a 2nd paydayTom Share this post Link to post Share on other sites
EQUITY NOTES 0 Report post Posted June 10, 2006 Quicks what I WAS TRYING TO SAY WAS DON"T HAVE SELLER TAKE BACK A 2ND, NO ONE WANTS TO BUY THEM INSTEAD START FROM SCRATCH, NOTE INVESTOR WILL PAY OFF FIRST MORTGAGE AND SELLER WILL GET HIS EQUITY OUT OR WHAT EVER IS LEFT. DO NEED SOME EQUITY IN ORDER TO GIVE SELLER A CASH OUT. HE CAN HOWEVER ASK FULL ASKING PRICE OR A LITTLE MORE DUE TO HIM DOING OWNER FINANCETOM Share this post Link to post Share on other sites
shawnhquick 0 Report post Posted June 10, 2006 I agree 100%. I work with a company called Easy Private Mortgage. We help sellers sell their homes because we try to facilitate the funds for buyers who can't get a traditional bank loan. We work from the sellers side only because we create a seller financed note. The seller has the option to either carry that note, sell a partial of the note, or sell the entire note to our investors at closing. Of course the note is sold at a discount, and that depends entirly on many factors. Our investors also purchase individual notes and pools of notes. If anyone has any questions please feel free to contact me anytime.Shawn Quick410-671-4569www.yourezsale.com/quick Share this post Link to post Share on other sites
4Rmgt 0 Report post Posted June 12, 2006 Actually TOM, I know there are some investors out there that will be a 2nd position seller financed note. I do not, but those that do, buy them at such a steep discount it doesn't make sense to sell it really. When I sell properties I love to use seller financing when selling. Opens up the potential pool of buyers. The 2nd position note is great for a little passive income. I get monthly payments each month, and eventually get my principal back when they sell or refinance the home. So I get more from the home. I had the pleasure of learning some of these strategies from the Seller Finance Guru - Eddie Speed. He will be in Chicago speaking on this topic on Sunday June 17th actually.. http://www.wcrt.org Share this post Link to post Share on other sites
