Can anyone provide any good links on where to buy notes or on how to use a wrap around mortage? Here’s the deal-
- Seller wants to retire; has a lot of equity in home and is willing to convert to retirment income for the sale.
- Wants to sell maybe 5% below fair market value.
- House is in move in condition.
- Rent would not come close to covering the mortgage of the sales price (market here is high home prices, low rents)
Possible Solutions-
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- Option to purchase the home from seller. As payment, have buyer agree to accept some cash and a note as payment at 7%
- During option period, find a 60%-70% discounted note equal to what the seller accepted
- During option period, find a qualified buyer. I pocket the difference.
OR
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- Option to puchase the home from seller using seller financing.
- Have the seller finance all the equity to me with seller financing at 7% fixed.
- During the option period, find a buyer advertising 95% owner financing, fixed 30 year rate, non-qualified buyer at 9%
- At closing, I pocket the 5% down, and keep the difference between the interest spread, like a wrap-around mortgage.
OR
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- I am out of my mind trying to engineer a transaction like this
- I should just try to hammer him down on price, then market the property myself within the option period for a sale higher than my strike price.
OR
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- Try to do a lease purchase and get the seller to agree to a low lease amount. Its vacant now, and the owner does not want to deal with tenants anymore. Then sub-lease it to a tenant/buyer. My only reservation with this approach is I’m not confident it can work on this house. From l2p seminars I’ve been to in my area, they say stick with bread and butter properties (up to 250K, 3 bed, 2 bath, single family). This is a 3 bed, 4 bath, $325k townhouse. And it was built in the 70’s. That’s just how home prices are around here.
Thanks guys.