Definance Your Private Debt

[Jason Dillard]

I wish someone would have taught me how to pay off lenders with created paper a long time ago. I have been using private lenders to buy houses for almost 20 years. When we keep one, we wrap the private lenders debt with a owner occupant's loan. Here is an example:

Purchase price 60k.

Borrow 70k at 6 percent from a private lender at close

Fix up house.

Seller finance with 100k wrap.

Now I own a 100k in paper with a 70k note that I am borrower.

How can I pay off this 70k for 35k?

Answer:

1. Buy a house for 35k cash that's worth more.

2. Seller finance the house for 70k at 9 percent

3. Offer that 70k note to your private lender in trade for the 70k loan on previous house. Most lenders like the higher rate.

Conclusion:

You paid 35k for your 100k note!