Can I wholesale a Owner/Seeller financed agreement?

[Chris Rand]

I live in Louisville Ky, and I'm new to real estate. I'm still researching exactly what I want to do but I had this idea that I haven't heard anyone talk about before.

If I were to get an owner to agree to seller finance their home(assuming that the home is owned free and clear) on terms including an assignment clause, could I then turn around and wholesale the agreement for a premium tacked on to the end buyer's down payment?

For example:

If I could get an owner to agree on seller financing a house for $100k, 10% down and 0% interest for 30 years giving me monthly payments of $250. With such a low payment it would be easier to cash flow. Assuming fair market rent for this property was 900/mo and after conservative expenses it cash flows $225 giving me a cash-on-cash return of 27%, could I then say turn around and wholesale the deal for 10k to an end buyer giving him a cash-on-cash return of 13.5%?

Could this work? Is it Legal? Am I missing something?

[David Melton]

What your describing is called wrap around financing. Most commonly a wrap is done when someone buys a property with financing (usually from a traditional lender) then sells it to a second party for more money, higher interest, etc. most likely on an unrecorded contract for deed. What you are proposing is to sell a turn key rental as a wrap. I would think most people looking to buy a turnkey rental would want a deed but I've been party to properties sold to other landlords on C4D with wrap financing, just never turnkey. Retail buyers whom could not get conventional financing were our primary customer base.