Seller financing with bonds? - Posted by Chris Powis

Posted by PBoone on May 13, 1999 at 23:22:42:

My apologies for not directly answering you. Yes you can use the equity in one property as down payment on another property. In the SFR arena it is done but usually needs some understanding and explanation on your part. The technique more common in Multi’s or commercial where the players have a better understanding of investing and cash flow.
As far as banks are concerned they usually have different lending criteria but 4-6 loans per bank seems to be the limit. The real estate and cash flow is what qualifies in most cases.

Seller financing with bonds? - Posted by Chris Powis

Posted by Chris Powis on May 12, 1999 at 23:06:37:

I finally bought my first home and I guess I’m on my way, but slowly. If anyone can help, I’m wondering:
A)How its possible to buy 3 or 4 properties a yr. as CS lays out in his course- Its going to take me 5 yrs to build the 20% equity I need to get rid of my PMI! How can I qualify for another mortgage before then?

B)An interesting way I think I can purchase another home is by having the seller finance the purchase. CS tells you to ask the seller "to deed the property to you, securing the equity you owe to the seller with equity in another property- a friend or partners property"
No seller I know however is just going to “deed” a property over to you- why would he & how would you actually use someone elses equity to secure this??? If this worked I would have the seller finance the property with bonds I buy from the proceeds I get mortgaging his property- but that initial equity quiestion I can’t figure out!

Simply put keep it simple - Posted by Mike Oldfield

Posted by Mike Oldfield on May 13, 1999 at 23:39:14:

My secod house (I now have about 60 of them), a duplex in a small town in western new york state near rochester was owner financed 90% LTV. I got the 10% equity from a line of credit based on my credit. We are talking small numbers here for my deal.

$45000 = $5000 from line of credit + $40000 1st mortgage from seller

Yes the infamous NO MONEY DOWN.

Seems simple enough yes?

Good Luck

Mike Oldfield

Re: Seller financing with bonds? - Posted by PBoone

Posted by PBoone on May 13, 1999 at 15:54:29:

One pondering idea for you may be??? "Do you think any business buys and sells a product at the same price with no profit in mind???
We as ACTIVE INVESTORS do not purchase real estate for “Pride of ownership” we do this with one thing in mind or maybe two 1) cash flow 2) high rate of return
Equity is not cash value after all try to buy a hot dog with the equity in your home.
I guess my real point is to look around the box of PASSIVE INVESTORS and never purchase a property for more than 80% of its FMV and that would only be when it is in pristine condition and already rented with a positive cash flow with minimal down.

Re: Seller financing with bonds? - Posted by Chris Powis

Posted by Chris Powis on May 13, 1999 at 21:10:21:

What you say makes sense but I don’t think it really answers my question-
What bank will give me another mortgage so quickly when I’m already responsible for one, if I don’t use a bank I can creatively finance using a sellers equity, but how?
Am I missing a bigger picture here?

Thnks - Chris