Find Buyers for FSBO Sellers for Owner Finance with?

[Trevor Smith]

Hey all, I just want to pitch an idea and learn what holes you can shoot in it,

I am in the midst of putting the pieces together to become a broker in connecting investors with buyers that have bad credit. The investors will have a wrap-around mortgage and make their profit in the spread of the interest rates. I will keep 5% of the down payment from the buyer. Before you poke holes in that, I assure you I will be compliant with regulations, and I will be ready for the due on sale clause. 

But hear this out: I got to thinking, what if I don't need these investors? What if people selling their houses are already investors in the making? I just need to present it to them. Can I find a FSBO and ask them, "would you be interested in cash flow every month with no land lording?" "What if I could find you a person with 10% down, money for closing costs, one year of insurance and taxes, and willing to pay 8.5% interest on a wrap loan?" Then I will set it up as planned but I didn't have to find the investor that needs 20% down with stellar credit and income.

Yes, yes, the due on sale clause. But if the lender calls the note due, we will simply revert the transaction, and I will owe the buyer a big apology. But nothing will be due if we just undo it. What do I need to put into the paperwork to be able to undo an owner finance transaction if we need to undo it? 

Also, could I offer this to sellers that are selling on the MLS? Or rather, to their realtor? Will the realtor present the idea to their clients? It could be an excellent option for houses that are hard to sell because they need fixing up. Often times, these buyers with bad credit will do the fixing up. Or maybe in neighborhoods that aren't selling so great. Will the realtors absolutely kill the deal by scaring the seller with fears about regulations, etc.? And if the seller doesn't "sell" the house, then the realtor will wonder about their commission?

Thanks for any and all feedback