Help on Structuring a Wholesale deal as seller finance

6 Replies

We are fairly new to the game and have only done regular wholesale deals prior to this, so I am needing some help. I have a homeowner that is in pre- pre-foreclosure (she's behind but has a stay from the court on proceedings until 10/10). The house is in great shape, needs a bit of updating but is liveable the way it is. The ARV is 356K, the balance owed is 147K and she needs right around 19K to get out of arrears. She is open to seller finance in order to move quickly and get a higher return. We would really like to be able to wholesale this as we have a full plate at the moment, but I have never done a seller finance one before and wondered if this was the best way to go and if so, how would I structure it so it was a win for everyone involved?

@Jason Todd I’m not sure what the best approach would be but I’m intrigued and would like to follow this post as it goes. Would you be able to buy the property subject-to and then with the additional equity in the property take a second mortgage to pay her the 19k? I Look forward to hearing others thoughts.

@Jason Todd First off, I would say to speak with your title/escrow company to make sure they can handle this type of transaction. The easiest and safest way is to be open with the seller as far as what your strategy is. Write up the agreement based on your convo with the seller. Open escrow then write up an addendum that transfers your rights to the buyer and gets you paid.  

Hope that helps, 

Louis

Originally posted by @Louis Davis :

@Jason Todd First off, I would say to speak with your title/escrow company to make sure they can handle this type of transaction. The easiest and safest way is to be open with the seller as far as what your strategy is. Write up the agreement based on your convo with the seller. Open escrow then write up an addendum that transfers your rights to the buyer and gets you paid.  

Hope that helps, 

Louis

 It does help, thank you!

@Jason Todd why not look into doing a short sale? In order to even do so, you would definitely need a buyer that wants the property & is willing to pay your fee & the seller's walk away money, out of pocket or in other words outside of the short sale contract with the bank.

You definitely also need a investor minded realtor that has a bit of experience with short sales & short sale negotiations.

If you do a seller finance deal, then the monthly payment would definitely need to cover the mortgage & you would still need to get the arrears paid + walk away money + your fee, all paid up front as a down payment by the buyer. This could be a great deal for the buyer depending on how much repairs are needed to bring the property up to ARV.