Creative Financing using Subject To and Seller Financing

[Yasha Wells]

Investment Info:

Single-family residence other investment.

Purchase price: $171,428
Cash invested: $11,383

I have acquired this property through creative financing. I purchased the property subject to the existing mortgage of $92,700. The first note is $874 monthly, including PITI. The second note is $70,728. I have financed the second note with the seller for over 15 years at $200 a month with 0% interest. In 15 years, the property will appreciate at a minimum of 3% year over year and be worth $267,079.24. Such a great hybrid deal.

What made you interested in investing in this type of deal?

I was highly interested in investing in this type of deal because it was low money down and something that could be done without traditional financing.

How did you find this deal and how did you negotiate it?

I found this deal checking in with a friend with who I have not spoken with in a while. I negotiated this deal finding out their motivation and what they would be willing to sell for.

How did you finance this deal?

Subject to and seller financing

How did you add value to the deal?

Helping the seller move on from the property and save real estate fees

What was the outcome?

I purchased the property

Lessons learned? Challenges?

Lessons Learned:
- find the motivation of the seller
- if there is other parties involved (spouse)
- who will be the final decision maker?
- don't get emotional

Challenges:
If you come across a challenge or where the deal does not feel easy. You are getting emotional! Take a step back and ask the seller what about the deal/offer doesn't work for them.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Myself - Real Estate Broker Associate