Let’s look at an example:
A seller calls you about a house on the river worth $750,000. It belonged to her mom who recently passed away and left it to her brother. It’s now vacant and has been on the market with a Realtor for six months at $699,000. The listing has expired and the sellers who live many miles away are trying to decide whether to relist. They would take a deep discount for cash and tell you so in a motivated voice. In fact, before you can get off the phone she indicates any reasonable offer over $500,000 will be seriously considered, but she doesn’t want anyone living in the house and wants all cash.
$500,000 Option only, three-six months, no risk, all cash.
$100 Deposit (tie up with an option agreement)
You Put it on the Market
$650,000 with a “desperate seller” sale to attract attention from owner occupant bargain hunters. One shows up with $200,000 but needs owner financing for two years to qualify. They can pay $4,000 a month until they do.
Here’s the Beauty of Terms
The beautiful thing about these deals is that you can negotiate with a seller to change your original terms when you locate a potential buyer. A buyer with cash in-hand is a strong motivator for a desperate seller to make concessions and discount the price so they can unload the house. Remember, a motived seller is one that wants to get rid of the house as quickly as possible.
So, you change the terms and present the seller with this:
$450,000, $2,000 a month, three year balloon, first payment due three months after closing
You then go back to the buyer and tell them you can get the deal done at $700,000.
So, at the end of the deal, here’s the situation:
You Buy With Owner Financing
Outgoing Payment: $2,000 PITI
You Sell With Owner Financing
Incoming Payment: $4,000
- $150,000 profit now
- $2,000 every month
- $50,000 when paid off plus potential discount from seller
- One or two months $4,000 income with no outgoing payment
Just get it under contract from the seller and make it perfect when you find a buyer!
Ron’s going to cover deals like this and more Terms information in a FREE online video training series cut straight from his new Terms course. Only those that opt-in to receive those lessons will get them, so head over to PrettyHouseTerms.com and sign up for your free training now!