Structured a seller finance deal, Terms: $10,000 down, purchase price 32,000, 3 year balloon payment, 6% interest.
I spent $21,000 in rehab, home has been appraised for $114,000. Although, I have someone who wished to purchase the home through a VA loan, I have denied her because I am more concerned with creating passive income.
Found a renter at $875 a month. I am wondering what method can I use to pull this equity out of the home to purchase more homes through owner financing techniques. Can I use the BRRR method? If not, then what method can I use with the consideration that this is an owner finance deal.
Can you payoff the owner financing early? If so, go to a bank or credit union to do a cash-out refi and draw all your cash out.
You're confirmation! Was totally lingering with that same scenario but I was trapped between doing that or taking the money and purchasing another owner finance deal as a pose to paying off this deal.
From what I've read, I believe that you can use the BRRRR method to obtain a mortgage 70-80% LTV and use that to pay off your seller, then use the rest to repeat this process. Just run the numbers to see what your cash-flow will be after cash out refinancing.
Yep! Yep! You are exactly correct! Will be BRRRRIng in 6 months!
Hey I'm just practice analyzing what good deal are.. So to be clear..
You would go to the bank and do a cash out refi. They would then give you 79.8k ( 70 % of the appraised value which was 114k)
You take that 79.8k and pay off the 32,000 seller financed loan which would leave you 47k to do this process again and still possibly having this cash flowing asset?
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