Another example is rent-to-own a/k/a lease option. I lease option a property from a motivated seller. I put $500 down and rent for $500 per month and a purchase price of $50,000. I find a buyer who will lease option from me, the middleman, for $3000 down and $600 a month and a purchase price of $55,000. My agreement with the seller is that I don’t pay him anything until I find a sub-tenant.
Ultimately I get $2500 up front at closing, $100 monthly cash flow, and a $5000 spread on the purchase price.
Re: Money Back at Close of sale - Posted by Darrin (GA)
Posted by Darrin (GA) on March 08, 1999 at 24:14:06:
Perhaps they are doing a double closing where they purchase the property and then obtain do a no seasoning, cash out refinance. While this is done, most mortgage professionals have never heard of it, so I tend to believe your theory.
Buy a property with a FMV of 100K that is in foreclosure (or probate, divorce, abandonned, etc.) for 60K and then take out a 70K investor loan at closing. Just one example.