Seller financing tips and tricks

[Jeffrey Bresch]

Hello BP!

I'm new to the investing world and am trying to get creative with a current deal that I am working. In short the house is weeks away from foreclosure, they owe full asking and cannot accept anything lower than that. I would like to get this house under contract and BRRRR all of my money back out of it because I see huge potential in the ARV. I would like to structure a deal with the seller to get the attorney fees paid, loan fees paid and work out a payment plan with them for the next 5 years using a seller finance model. Does anyone have any experience structuring a deal of this sort and could you help a newbie out? Or maybe this model isn't my best option? Any advice would be greatly appreciated!

Thanks, Jeff.

[Christopher Phillips]

@Jeffrey Bresch

You can't seller finance a foreclosure. Seller financing requires that the property is actually sold to you with title and the owner is holding the note. If you buy with them still holding a mortgage, that's a Subject To and subject to the previous owner not paying their mortgage and/or the bank calling the loan due - with a change in title there is nothing behind the mortgage anymore. 

There are some occasions that a property going to foreclosure has some equity, but most owe more than what the home is worth. BRRRR assumes you're buying at a deep discount, not over paying.