Pay off existing mortgage: The new loan pays off your original mortgage, including closing costs and any prepaid items.2.

-Since it's an Owner-carry, do I still need to set up escrow for prepaids/homeowners ins/property taxes?

Heres the numbers:  Borrower(s)Subject PropertyRate Not Locked 9/30/2024 Sales PriceDown PaymentLoan Amount30 Year FixedContract DepositSeller ConcessionNMLS#  $670,000.00$167,500.00$502,500.007.000% $0.00$0.00  Bank Origination Charges Estimated Title / County / State ChargesOrigination Points % $ - Owner's Title Insurance $ 4,415.00Discount Points % 1.500% $ 7,537.50 Lender's Title Insurance $ - Underwriting Fee Title Search $ - Appraisal Fee $ 650.00 Title Services $ - Credit Report Services (1) $ 299.00 Alta 8.1 $ - MERS Fee $ 25.00 Recording & Transfer $ - Flood Certification $ 8.00 Notary $ - Tax Service $ 85.00 Settement Fee $ - VOE Fee $ 150.00 Total $ 4,415.00 Total $ 8,254.50 Prepaid Interest / Items Potential Additional CostsPer Diem Interest 15 Days $ 1,465.63 Rental 1007 $ 250.00Home Insurance $ 1,800.00 New Survey (if applicable) $ -Flood Insurance $ - 2nd Appraisal / Reinspection $ - Total $ 3,265.63 Total $ 250.00 Escrow and/or Property Taxes Due Total Estimated Monthly PaymentsTotal Insurance(s) 3 Months $ 450.00 Principle and Interest $ 3,343.15Property Taxes 4 Months $ 2,868.64 Total Property Taxes $ 717.16Total $ 3,318.64 Total Insurance(s) $ 150.00 HOA / Maintenance $ - Monthly PMI $ - Total $ 4,210.31Total Estimated CostsEstimated Closing Costs $ 12,919.50 Estimated Escrow Prepaids $ 6,584.27 Estimated Funds To Closing $ 187,003.77

Prepaid taxes and insurance, any lending fees, points, surveys, settlement fees etc

Prepaid rents,and possibly ownership of things such as appliances by tenant.

Might be a little lower than a purchase, but you will still be paying lender fees, title fees, escrow fees and prepaid items. 

I know of a company that went through a broker like this and the broker connected them with someone That ended up having a pretty bad history and the borrower wired millions after paperwork was signed for “prepaid interest reserve” and now, while they got the judgment, the money was sent overseas and it’s most likely long gone.

Possible, yes, but you'll be looking at $5k-$6k in lender fees plus title fees, prepaids and escrows and a higher rate. $75k is a little easier to find and slightly lower rates/fees. 

Yes, rates are high, but dollar for dollar there are many positive and cash flowing investments to be found, or...made.A tactic I've been utilizing for buyer(s) recently is the deployment of seller concessions in the form of seller(s) contributions towards buyer(s) closings costs, pre-paids or interest rate buy downs. 

I guess the only good thing about a prepayment penalty is that is is considered prepaid interest on your 1099 statement which may help with tax deductions.