Using Seller Financing for those Fix and Flip Deals

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In order to make real estate investing your career there are a few components to success: Real Estate knowledge, a good team around you, a good deal in front of you, and adequate capital to fulfill your exit strategy. The money part of the deal tends to hold most people back from pulling the trigger and starting their investment career, yet there is a powerful force that can be used to give you the capital you need to be successful investing in real estate: Seller Financing.

Over the last six months we have talked about many aspects of seller financing, but one thing we have not covered is how to use seller financing for a traditional fix and flip real estate transaction. In this scenario the seller agrees to finance your purchase, which allows for the “where is the money?” question to no longer be an issue. With the financing in hand, you can focus on the other aspects of making the deal successful, such as what improvements to make, how to market the property, and how to close the sale. So what does seller financing a traditional deal look like, let’s take a look at a recent example I did to see how it can work for you.

Following up on a lead I tracked down by calling on a “We Will Finance You” sign, the investor had a property he was willing to sell, but only for a price I couldn’t pay cash for.  Instead of passing up on the opportunity I offered to purchase his property close to his price if he would offer me short term financing. After negotiation we agreed upon terms which included zero money down, and no payments for 12 months. The deal was closed at a title company and the land contract was recorded with the county.  These terms allowed me the time I needed to properly rehab the property and get it ready for the traditional retail market.

In the end I was able to apply my capital towards the rehab and afforded me the opportunity to offer my salesperson a higher commission to move the property in a timely fashion. As of today the property is pending after being on the market for a mere 17 days. When we close on the property the seller who offered me financing will receive close to their asking price, I will make a profit on a true “zero-down” deal, and the homeowner moving in has a property that was properly rehabbed. Not to mention the property is a great improvement to the neighborhood.  Seller financing has created a true win-win-win scenario.

Have you used seller financing for one of your deals? I would love to hear your story, and as always your comments and feedback are appreciated.

Photo: Land of Nod Studios

About Author

Kevin Kaczmarek is President of Capital Blueprints, LLC. Serving a national and international client base, Kevin helps clients achieve their personal goals for long-term stability and solid financial growth through Self Directed IRA Investments and individualized Passive Income Strategies.


  1. I am in the seller financing business – we buy the notes that are created. Right now we are seeing a lot of seller financing being created that is not properly protecting the seller or being structured so the seller can get the most out of the transaction. Selling a property with seller financing to get the most out of it requires a basic knowledge of what are the factors that ultimately determine what makes a good note. We refer to this whole process as Note Manufacturing. The major factors include:
    – What does your buyer look like?
    – What is the LTV of the property?
    – How much was the initial down payment?
    – What are the terms of the note?
    – What initial paperwork was done?
    – What is the payment history?
    When done right, seller financing is a great solution to a troubled economy.

  2. Great post Kevin, and fantastic strategy. However, unless someone put up the rehab money for you, one could argue this wasn’t technically “zero down”. 🙂

  3. Philip Bourdon on

    I am writing this message to as many seller financing articles as possible. Does not the SAFE Act require you to either be a Loan originator or hire one? Referring to investment properties.

  4. Safe Act – if it is an investment property (you never lived in) you do need to hire someone to do your document prep who is licensed in your state. Each state has adapted their own laws as to the number/amount you can do each year before it is mandatory. For safety sake, it is just easier to do it everytime so you never have to worry about.

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