Bringing a note buyer to a cash deal

[Nuhan Demirkan]

Has anyone tried to bring a note buyer to cash deal? I am tapped out on my mortgages with 10. Looking to purchase rental properties with a seller carry back. But if the seller insists on cash I am thinking about giving the seller a note for more than the asking cash price and bringing in a note buyer to provide the cash to the seller and carry my note. Any suggestions?

[Bill Gulley]

This is really "funding at the table" exactly what mortgage brokers do that sell at settlement.

You can't really raise the price as any note buyer will be looking at the value of the collateral to any discount at closing, not the contract price.

Next, if you attempt that, the note buyer will probably be looking at you as trying to pull a fast one. It has an odor of fraud to it.

Now, to accomplish what you want and staying above board, which I know you want to do, just wasn't aware....

Do a market rate deal, sell the first mortgage, you can agree to do a second mortgage to the seller in the amount of the discount in the contract. The seller holds the second and sells the first.

Consider the seller selling a certain number of payments which should provide a better bid as the seller will be selling payments with recourse, another consideration.

You can make a second putting you underwater but I'd suggest you not go very deep.

You could also do a second on another property, or several others.

I'd suggest too that you start looking at a blanket mortgage on several properties (with a release fee on each) and begin consolidating the debt to free you up for financing.

Creative financing is utilizing the assets you have to leverage a deal within the boundaries of conventional requirements, the rules and regs, not getting wild with schemes. :)