Creative Financing/Relocation for new job in Florida

[Mickey Scott]

Looking for tips or Insite on purchasing a house with creative financing in Florda near the Space Coast or Treasure Coast. I have recently accepted a new job working 50% remote and 50% at Hospitals near Broward County. I will be selling my home in June when our kids finish school and then relocate to Florida. Current Home is in Shepherdsville, KY outside of Louisville. Please reach out if you have any tips, realtors in Florida working in that area. We would prefer to move between Port Sant Lucia and Melbourne/Viera Florida. Thanks,

[Justin Webb]

Quote from @Mickey Scott:

Looking for tips or Insite on purchasing a house with creative financing in Florda near the Space Coast or Treasure Coast. I have recently accepted a new job working 50% remote and 50% at Hospitals near Broward County. I will be selling my home in June when our kids finish school and then relocate to Florida. Current Home is in Shepherdsville, KY outside of Louisville. Please reach out if you have any tips, realtors in Florida working in that area. We would prefer to move between Port Sant Lucia and Melbourne/Viera Florida. Thanks,

Hi Mickey,

While typically I advocate for retaining properties for rental benefits, selling can be the right move under certain circumstances. Your situation presents a unique opportunity to leverage seller financing, an advanced and creative technique that aligns with your needs.

Consider offering 100% seller financing for your Kentucky home. This method allows you to set terms that not only cover your existing mortgage payments but also provide additional cash flow each month. Importantly, include a term limit with a balloon payment – for example, a 5-year term. This condition ensures you’re not locked into your original 30-year loan, efficiently freeing up financial obligations.

Following the sale, the promissory note you receive becomes a powerful tool. You can use it to secure a loan, usually between 75-80% of its value, giving you the financial muscle to pay cash for your new property in Florida, in your preferred areas between Port Saint Lucia and Melbourne/Viera.

For example (I'm making assumptions):

Imagine you're selling your Kentucky home for $400,000. Originally, you had a loan of $355,000 with a current balance of $310,000 at a fixed 3.5% APR over 30 years. By opting for a 100% seller financing strategy, you're essentially stepping into the shoes of a lender, offering the buyer an opportunity to purchase your home without traditional bank financing.

1. Sale Price and Loan Terms:
   • You sell your Kentucky home for $400,000.
   • You offer 100% seller financing to the buyer at 4% interest over a 5-year term with a balloon payment.
2. Original Loan vs. Seller Financing:
   • Your original loan was $355,000, with a current balance of $310,000 at a fixed 3.5% APR for 30 years.
   • Monthly payment on your original loan (assuming standard 30-year fixed terms) is approximately $1,593.
   • Under seller financing, the buyer's monthly payment for a $400,000 loan at 4% interest (calculated as a 30-year loan but with a 5-year balloon payment) is approximately $1,909.
3. Monthly Cash Flow Spread:
   • The difference between your current mortgage payment ($1,593) and the buyer's payment to you ($1,909) is $316. This amount represents your monthly positive cash flow.
4. Balloon Payment Calculation:
   • After 5 years, the buyer owes the remaining balance of the $400,000 loan. The outstanding balance after 5 years (60 payments) will be approximately $364,814.
   • The buyer would need to pay this amount at the end of the 5-year term, typically through refinancing or other financial arrangements.
5. Using the Promissory Note for Financing in Florida:
   • The promissory note valued at $400,000 from the sale can be used as collateral.
   • Assuming you can get a loan of 75% of the note's value, you could potentially access $300,000 to assist in purchasing your new home in Florida.

This detailed scenario underscores the potential benefits of seller financing, such as generating additional cash flow and converting equity into liquid capital for reinvestment. However, it's crucial to note the importance of thorough due diligence and professional advice. The calculations provided are estimations and could vary based on specific loan terms, tax implications, and market conditions in both Kentucky and Florida. Consulting with financial and legal experts ensures that both the sale and the subsequent purchase align with legal requirements and your personal financial goals.