Owner Carry/Financing?

[Emil A.]

I am a young real estate investor thats looking for his first deal.
Although iv tried reading different articles on this topic, i still find it very difficult to understand how owner financing works... i see the term 'own carry mortgage' many times - word around town is that you can get deals with little down payment? then what happens?

If anyone here has this field as a concentration in their investments, i would appreciate some info

thanks

[Scott M.]

To make it simple say I own a home free and clear.

I decide that I want to sell it VS renting it.

Because the credit / appraisal markets are tight and because I own it free and clear and because I don't really need all the cash right now - in fact getting paid each month might actually be nice I put up one of those signs you see a lot of. $5,000 down / $1,200 / month / 15 year land contract or lease to own.

What that means is I am selling the house for about $110K - getting $5K up front and then going to finance the balance of $105K over 15 years at 11% interest. In the end I end up with about $221K VS the original $110K I was selling it for.

I then have an income of $1,200 per month. After 15 years the buyer owns the home free and clear and if all goes well I made a lot more then I would have if I sold outright for $110K.

It can be done even if you have a mortgage on it – you can sell to an investor and they can rent for more then they pay you – is it that easy – well – kind of – but lots more to it once you get into them of course….but bottom line