When selling a flipped house, do you get the money right away?

[Galit Garsiel]

When you sell a house you've flipped, can you get the money right away, or do you have to let buyers pay mortgage, because nobody is willing or able to pay all the money upfront?

[Jeff Copeland]

If you are the seller, and the buyer purchases your property with a conventional mortgage, the lender provides the money up front, subject to a certain LTV (loan to value).

If the LTV is 80% (common for residential owner occupied properties) and you sell them them house for $100k:

--The buyer pays $20k (plus closing costs) as a down payment

--The lender provides $80k

(The buyer's repayment terms are between them and their lender. It does not involve the seller at all.)

--The seller gets $100k (minus closing costs)

(Note: the seller has to pay off any liens on the property, such as pre-existing mortgages, to be able to sell it free and clear. So if you bought the property with a $50k hard money loan, or any type of mortgage for that matter, the seller's lender gets paid off first, and then the seller keeps the rest. So they would walk away with $50k, less any closing costs, in this scenario.)

At a typical real estate closing, the seller gets their month that day - They either leave the closing table with a check in hand, or have the funds wired to their bank. 

Again, the buyer may be paying back the $80k they borrowed for the next 30 years, but that has nothing at all to do with the seller.

All that being said, it is possible for the seller to essentially be the lender, by financing a portion of the purchase price. This is called seller financing. 

For more details on both types of financing, see https://www.biggerpockets.com/...