Cash vs. Seller Financing

3 Replies

I locked up a property over the weekend here in Utah that I plan on flipping. The sellers agreed to our cash offer and we signed the REPC.

After signing Mr & Mrs Seller opened up about their plans more that her father is going to carry the mortgage for them on a property he had previously been renting. I asked them if that would be an option for us as well and they have been texting me about entertaining the idea. I want to see how the deal can be sweetened by seller-financing and would appreciate any help on formulating an offer. So here are the details on the deal.

174,000-Purchase Price



90,000-Balance of Seller mortgage (approx. $84,000 in equity)

I have my Hard Money setup for the cash offer at 1 point and 11%.

My current thoughts were to present them with two offers

  1. 1-$15,000 down and increase the purchase price by $3,000 while we pay their PITI payment monthly
  2. 2-$84,000 (all equity) at the same purchase price as the cash offer and pay them monthly PITI with an extra $500

We dont close till July 31st so I have a minute to come up with an alternate offer just trying to crunch numbers and see if it actually benefits me this time to seller finance the deal.

@Nathan P.

Maybe because it’s late, but I don’t understand. Sounds like you are really assuming their mortgage or something. If the taxes and home insurance are escrowed, that also means the home insurance will be in their name unless you change it....... what is their piti? What are the terms of the mortgage and how old is it? Need more info... unless you are doing something else

It all boils down to whether or not they need their equity now. Are you better off coming in with $114K down (equity & rehab) than just buying them out with hard money? Your HML will likely not lend in second position.