Seller Carrying Back a Note

[Account Closed]

So I currently have my property up for sale and another investor mentioned that I should carry back the mortgage to seller finance it. I'm a little confused because I thought you had to own the home outright to seller finance it? I have a 1st mortgage and HELOC on it. There will be capital gains if it sells at my asking price. Any clarity is greatly appreciated! Zee

[Kerry Baird]

You could offer some of the equity in it as a carry-back loan. Not the entire amount, but you could still carry back a second. 
Example: the buyer has 10% down. They go get a lender who allows seller carry backs such as an 80/10/10. Your first and second together are 80% of the purchase price. They get a loan for this amount. This pays off your first and second.

They put down their 10%. You carry 10% back and get paid interest on that 10%, while their new regular bank mortgage pays off your first and second.

You pay capital gains on the amount of gain you have in the year it is paid. You get interest only, or principal and interest on that 10%, depending how you want to get paid.
A title agent set these up for me at closing when I sold houses like this. I still got a stream of money from houses I had sold.