Seller Financing Capital?

[Tracy Stingley]

Hi friends! 

I am just starting out in REI. I am trying to think through creative ways to get started. I have been renting a townhome for the past 5 years. I am wondering if it would be possible and/or advantageous to do a seller finance agreement with the owner(my Aunt) and use that as capital for a hard money loan or another source of funding. I know that it's possible to do the seller finance for the home, but I am wondering if I can use the interest in deeds as capital for another loan. Does this even make sense?!

#Newby #REI #SellerFinance #Capital

[Joe Harper]

It makes sense if one of these is true:

1. You want to buy the townhome from your Aunt, and then pledge any equity as a non-cash down payment on a second property, as a second mortgage with no payments.

2. You want to find a lender to give you the equity as cash for a down payment on a second property.

If you buy the townhome from your aunt, you can't sell or borrow against her "interest in the deeds", but she will likely be bombarded by mail from people wanting to cash her out of that note, at a discount from the face value.

Can you clarify if you meant your equity or her equity?