Seller Financing Questions

[Matt Nusbaum]

Hi there,

I was listening to one of Sean Terry's podcasts about creating deals from sellers with little to no equity. He gives an example about buying a home worth 100k and the seller owes 98k. He says he will offer the seller 1k cash and leave his existing loan in place for 3-5 years. Then he goes on to say he would try and find a buyer who will put 12k down and take over the original sellers loan. He says that you will make the difference of 12k less the 1k you give to the original seller less closing fees. So around a 10k profit.

I have two questions here.

First, are the end buyers paying 12k plus the 98k existing loan for a total of 110k? I am confused why Sean is saying its a 12k down payment when that money isn't going towards the loan of the property.

Second, how exactly would the end buyer refinance the deal after the 3-5 years?

Thanks!