Posted by JohnBoy on November 10, 2000 at 17:13:40:
If she has good credit and wants a no money down deal, then write up the sale at the $52,500. She gets a new loan for 80% LTV (42,000.00) and you carry back a second for the 20% ($10,500) difference. With good credit this shouldn’t be a problem. Although, having it rented at $450 will give her a negative cash flow if she’s paying $52,500 with no money down.
You could carry the second with 0 payments for x number of months to give her the positive cash flow until she can increase the rent and/or pay off the second. Maybe should could hold it for a year, then refinance again and pay off the second. Maybe you would even consider taking a discount for a full pay off on the second after a year for a quick $5k, $7k or what ever???
Since she wants a no money down deal, then you agree to some terms to help her make it happen. You get the $40k cash you need, plus you have an $2k you could offer to pay closing costs with and you end up with a $10,500 second for your troubles that you can collect income off of or agree to discount it to her for an early pay off, which she can take care by refinancing the property after a year.