Owner Financing

Rehabbing, Fix and Flip, Rental Properties
1

Extreme newbie question,

Is it advisable to purchase property with a conventional loan and then turn around and sell it carring the finance via Land contract.

Scenario:

(1) Purchase property 100% financed coventional mortgage = 125,000 @ 6.5 interest

(2) Find buyer needing owner to carry the loan and sell property with follwing terms:

        a.  145,000 @ 9.5 interest for 3 years
        b.  15,000 down payment
        c.  Baloon payment after 3 years for the balance of the loan

Is this feasabile or am I on crack?

Thanks

2

That works really well. Just be advised, that before the third year, the occupant/tenant will give the house back to you and you will have to do it over again. It will take at least 3 deals before one will go through. But that will be $45,000 plus the positive cash flow in the mean time.

3

It sounds like you are on crack. 8)

Just Kidding. I Agree with Bluemoon that this can work really well.
Maybe you could start them working with a lender right away…after you close the deal so that they can do what is necessary to cash out quickly…unless you want the positive cash flow.

My real estate coach…from a few years ago did that type of scenario and has done extremely well.

I think it is a great strategy…as I am going to start building my holds portfolio.