What am I talking about? The subprime market really just filled a gap in the equity position that we used to have to fill with our own (earned) dollars or, exchange dollars! Since we are hindered with dwindling loan programs and prices, those 'used to have' dollars are few and far between!!!
Seller Carryback Loan/Created Note: The whole purpose of the seller carry was to fill that gap between conventional financing, and a cash down payment (if any)however...lender's have even challenged that age old concept for us so, now...we use a 'created note' against another property that the buyer has...no, we don't go to the bank! We just have the title company prepare a standard note and secure it with a recorded deed of trust against the buyer's existing property and hand it to the seller of the property we are buying, at closing, in lieu of cash. Hopefully, there will be enough cash generated from the balance of the purchase price which will be financed to generate the necessary closing costs to complete the transaction...if not, well....in reality if we were able to 'sell' this simple concept enough times and had to carry commissions...we could create ourselves a pretty safe and secure income stream. Often times though, the buyer will have a few dollars to pay for some of the costs...???
I hope this answers some of your questions as to what I mean by a 'created note'....they're simple as pie to do...however, you have to have a lender who understands this concept inside and out. I find a lot of lenders unsure and uncooperative so, if you run in to that...give me a hollar...I'll give you some names!!!
Remember to look for the benefits to all parties in a transaction. Ask what the seller is going to do with his money when he sells his property? Buy another property? A boat? Pay bills? Savings? Whatever, this may lead to another transaction and, another income stream for all. I really like the seller's who say they are going to pay bills or put their $ in savings...we can usually work the additional monthly income stream in favor enough to accomplish those without any trouble....
Your seller's who are having difficulty selling their properties...Offer to carry with 10 percent down at a fair interest rate on a contract...talk w/the lender and an attorney...it might be easier than you think!!!
I love this business!!!
Here to share....
Comments(2)