Owner financing so I can sell the mortgage

4 Replies

I have a question if I buy a home with a great discount why can't I owner financing then sell the mortgage provided I get a good discount on the home I understand that I may not get full price for the mortgage but if I sell at 70% of value and got home at 50% isn't it a win.

yes it is a win and that is a great idea.  You can also sell for more than 70% of value.  In general you need to season the loan for 3 months or more, but you can sure churn some quick cash that way.

I actually do what you are proposing some times.  Its a good way to exit a transaction with a lump of cash.  What you paid is irrelevant.  it is the income stream that the note buyer will pay for.

To your success

Josh

What's the best place on the open market to sell it you think.

You'll probably do better to just sell it to someone with cash for financing, and get a better price than the discount on the note you sell.

Dave,

Experienced note investors will care if you bought the property for half of your resale price, even if you rehabbed or put in a lot of sweat equity. 

You may have an excellent deal where your resale price is totally legitimate. However, the note investor will question why are you willing to walk away from so much more profit by not selling to buyers with conventional financing. They will question your motivation of leaving so much profit on the table.

New note investors may not care what you paid for the property but eventually they run into a deal that puts them out of business.

Don't worry about finding note investors. You will likely start receiving letters from experienced and newbie note investors a couple weeks after you record the transaction.

Good Luck

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