Posted by Michael Morrongiello on May 01, 2000 at 18:22:52:
Sam:
Here is one way to make this deal a reality and profit;
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Tie up the seller under an assignable contract to purchase at the $130K sales price. Cash at closing.
Build as much time into your closing date with possibilities of an extension as possible. Make sure you can show the home anytime to prospective buyers. -
Then run an ad :
$8,000.00 Down, $1,428.49 per month
Owner Will Finance
NO Bank Qualifying
lovely, 3/2,
Call Today…
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Phone starts to ring, you screen calls for the BEST quality buyer that has at LEAST $8K cash or preferably more to put down, has decent credit scores and a credit profile (FICO’s over 600) and strong employment stability.
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You offer to sell to them for $160,000.00, they put down $8K and your agree to finance the $152K balance by taking back (2) two notes; a $136,000.00 1st lien note @ 11%, payable $1,295.16 per month fully amortized over 360 months along with an “Interest Only” $16,000.00 @ 10% 2nd lien note. The combined payments equal the advertised $1,428.49
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At closing you sell to a note funder (we would love to work with you) that $136,000.00 1st lien note and receive approx. 93% of its balance or $126,480.00 in cash. You also retain the $8,000.00 down payment, along the interest only $16,000.00 2nd lien note.
From the proceeds provided you complete your purchase and acquisition from the original seller for the $130,000.00 purchase price.
You make some cash profit ($4,480.00 +/-) at closing and hold a $16K 2nd lien note that pays you $133.33 per month with the full $16K due in the form of a future balloon payment.
The interplay of the buyer, their employment stabilit, credit profile, and credit scores, etc. all will ascertain how easily this deal can come together.
There are a lot of components in putting together this type of deal. Work with a competent professional to assist you in making it happen.
To your success,
Michael Morrongiello