My question is: if I was to find a property I wanted to purchase, but wanted to do seller financing so I can use a loan to finance the rehab, is it possible for me to sell the house after the rehab when I still owe on it?
For example: I agreed to buy a house for $50,000 with an ARV of $150,000, and did this with seller financing. Then I put $20,000 - $30,000 into it and then sell it for the $150,000. Can't I just pay off what I owe to the owner, and pocket the rest?
Im sure someone has asked this question, but I couldn't find anything similar.
My question is: if I was to find a property I wanted to purchase, but wanted to do seller financing so I can use a loan to finance the rehab, is it possible for me to sell the house after the rehab when I still owe on it?
For example: I agreed to buy a house for $50,000 with an ARV of $150,000, and did this with seller financing. Then I put $20,000 - $30,000 into it and then sell it for the $150,000. Can't I just pay off what I owe to the owner, and pocket the rest?
Im sure someone has asked this question, but I couldn't find anything similar.
Thank you to whoever reads this post.
Mat
Yep. That's the whole idea. The seller is just the bank, when they do seller financing, they are the bank, you are the owner.
One thing though, make sure you have title insurance and close through escrow when you buy the house. Many a deal has gone south by not being careful.
My question is: if I was to find a property I wanted to purchase, but wanted to do seller financing so I can use a loan to finance the rehab, is it possible for me to sell the house after the rehab when I still owe on it?
For example: I agreed to buy a house for $50,000 with an ARV of $150,000, and did this with seller financing. Then I put $20,000 - $30,000 into it and then sell it for the $150,000. Can't I just pay off what I owe to the owner, and pocket the rest?
Im sure someone has asked this question, but I couldn't find anything similar.
Thank you to whoever reads this post.
Mat
Yep. That's the whole idea. The seller is just the bank, when they do seller financing, they are the bank, you are the owner.
One thing though, make sure you have title insurance and close through escrow when you buy the house. Many a deal has gone south by not being careful.
Investor · Jackson, MS · Member since 2021 · 657 posts · 559 votes
3y
As Mike said, seller financed, bank financed or HML financed are all the same. When you sell the property the loans are paid off and you pocket the difference. It is also critical that you engage a title office to ensure you are getting a clean title and don't find out when you sell that the seller forgot to mention the other three loans he had against the property that now have to be cleared. I would make sure it is clean BEFORE you start putting reno money into it so you are not left paying for work that you will never get paid back for. Hate to have a house worth 150K and owe $180K on a great reno.
Investor · Austin, TX · Member since 2021 · 9k+ posts · 5k+ votes
3y
If you are paying for the rehab in your own cash, then it works. You are likely not going to get lending for the rehab if you owner finance. Once it comes time for you to sell, all liens will have to be paid off before you get paid.