Seller-Carry-Equity

Seller gets Tens of Thousands and You as an Investor Limit Your Risk

by Peter Conti and David Finkel

In this article you’ll discover a little known method of buying a house where the seller gets tens of thousands of dollars up front, and yet it’s still a nothing down deal for you.

This method of buying homes is called The Big Money Cash Close and it works with homes that are either free and clear or have a very small loan (30 percent of value or less) compared to the value of the home.

Free and clear means that there is no longer a loan in place that needs to be paid off when the property is sold.

Depending on the area of the country you live in, from 40 to 60 percent of the homes in your area are free and clear. When you do run across one of these free and clear properties, you have an opportunity to use the Big Money Cash Close.

With this method you’ll be purchasing the house rather than just leasing it. You’ll finance the first part of the house by getting your banker or mortgage lender to give you a new first mortgage for 50 percent (or less) of the property value.

The rest of the purchase price will be financed by the sellers.

The sellers will hold an owner carry 2nd mortgage to secure their money that is due to them.

The key to structuring a Big Money Cash Close correctly is to set up the financing so that:

The amount of money due to the mortgage lender on the first mortgage each month plus the payments (if any) due to the sellers are less than the amount you can rent the property out for.

If you are going to pay normal interest rates on the first mortgage to the lender, you can’t also pay normal interest on the second mortage to the sellers. The reason for this is that the combined payment will be more than you can rent the property out for.

In a Buyer's Market, with Sellers getting nervous about closing and getting their asking price, this is a terrific strategy!

Sellers usually will take our Terms if we help them get their Price!