Opinion on Seller Carry-back Mortgages

[Jairmiya St. Hilaire]

Hey guys, 

Was wondering if anybody had any advice to share about any complex seller financing/bank financing that you've done to close a deal? 

For example: If I found an apartment building that had a landlord that was burnt out but still around the age where they could still use some cash flow I would offer an opportunity where I could go to a bank and ask them to finance 70% instead of the normal 80% which is better for your LTV come time to underwrite the loan and then would ask the seller to carry back the other 30% and instead of paying a bank all 80% of the home and me having to come in with 20% cash I would come into the deal with absolutely nothing down while I finance the property through the bank and the seller. The bank wins with 70% equity in the deal, the seller wins because they don't have to pay capital gains on the entire purchase price and they get to collect steady cash flow for the next 30 years, and I win because I get the deal done with nothing down collecting the cash flow, capitalizing on the depreciation of the property and writing off everything in between.

Once again, this is just a quick example of a slightly complex financing strategy but this is the stuff I Love to talk about and learn about here on BP so please, if anyone has anything to share so that we can all learn from each other please write them here!!!

R,

Jairmiya