Pre Approval Creative Finance

[Noah Bussanich]

Hello,

I'm looking to buy a seller carry deal. I'm looking on and off market. I spoke with a broker today and they said when I put an offer in, I still need to have a "pre-approval" letter from a lender to the seller. Is this true? 

[Nicholas L.]

@Noah Bussanich

who is the broker, and what is their relationship to you / to a potential transaction?

it's possible that what they meant is that they want you to show that you're well capitalized - for example, you produce a bank statement showing you have adequate reserves.  i have had agents ask for this in the past. 

if it's off market, then everything is really between you and the seller.

but post more info if this is not capturing the situation accurately

[Chris Seveney]

@Noah Bussanich

That depends

Some sellers will still qualify you as a traditional lender (they should anyways).

Also you should also want to make sure a third party believes you can afford the home

As an investor myself we are kicking our chops right now at all these “creative finance” deals that borrowers could not get traditional financing on and got some sort of seller financing and they clearly could not afford the home so come end of 2024-2025 we will see all of these defaulted loans on this which I will look to swoop in and buy at 50 cents on the dollar

[Nicholas L.]

@Chris Seveney

what sector is that distress going to be in - large multi or small multi?

[Andrew Postell]

@Noah Bussanich when you say "seller carry" do you mean that the seller would carry a note in the 2nd position?  Or are you saying you want the seller to finance the entire property?

[Bill Lewis]

as newbie, what?  Does this mean the seller is the Bank?  you are paying them to pay the Mortgage?