I have a home buyer that is suffering from bad credit due to divorce. His credit score is low 600's. So he will be able to refi in the foreseeable future.

He has $5,500 that he can pay per month for a mortgage, although he would prefer to pay less. But he has a great income. He has 10% to put down on this house he wants. He picked it out already. We don't have to spend a dime on marketing to motivated sellers or trying to get a house at a huge discount.

House list price is 489k which is an accurate and fair asking price. I propose that you, the wise investor, buy the house. Collect his down payment of $48,900 which you will split with me 50/50. I know of other companies doing this that take 100% of the down payment. But I don't need it all. I want everyone to benefit.

Now you put 20% down or whatever your lender requires which would be 88k. Finance the remaining 352k at 6.5% commercial loan, or whatever best deal you can get.

The home buyer's payment to you will be $3,828 per month. Your payment for 352k at 6.5% for 30 years is $2,224.

You will cash flow $1,604 every month without any of the headache of land lording. You will owe no property taxes, do no repairs. You don't even have to collect the payment or make your own payment. A finance agency will collect your payment and make your payment for you for $30 per month or less. They will also report the buyer's payment to a credit bureau to help repair their credit. When their credit is good enough, they will refi and pay you off.

If you ever need your money back for whatever reason, you can sell the note for full price to someone else that is interested in great cash flow. I won't guarantee that you will sell it immediately. I have never sold a note and I don't know how long it would take. That is something you would need to research. I also can't guarantee that your lender would not call the note due when you try to sell it. From what I understand, if they call the note due, you can simply back out of selling it. I am told big banks will never call the note due so long as it is performing.

I won't say there is no risk. I will say all the risk is mitigated. If you think that this home buyer is going to default, just ask yourself who is going to throw away a $48,900 down payment? Plus the payments he made up until then. Plus, you have half of the down payment to cover your debt service until you find a new buyer or are able to sell the house. You know the house will be in good condition because this buyer owned the house instead of renting it. We will require that he pay for home-owners insurance for a year up-front. His property taxes escrowed. All risks should be mitigated.

If you're trying to create passive income through rentals, well, that is one way to do it. If you want to be responsible for tenants mistreating the property, all the repairs, all of the CapEx repairs like the roof and everything else. Plus paying property taxes and insurance. Plus vacancies! The list goes on and on. I truly think seller-financing is awesome.

Please reach out to me if this sounds awesome to you!
Trevor Smith

[email protected]

928-451-2071

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