All Forum Posts by: Poorya K.

@John Mathewson Purchasing and financing the property only vs the property and the rehab allows the risk to be spread more equally between the end investor and the lender.  Additionally, by purchasing the property and owner financing it to the flipper or buy and hold investor, it allows me to do more deals because I have less capital used up in the deal.  It also allows the investor to use the money that they have might put down in cash to buy the house to use that money for the rehab instead.  Here is an example:

I find a house and purchase it via a wholesaler or by whatever means significantly below market value, lets say for $15,000.  I offer it for sale as an owner financed deal for $25,000 ($1500 down and

$337.16/month)  I would probably add an extra $100 into the mix for servicing fees and escrow of taxes and insurance so the monthly payment would come up to approx $450/month.  The end investor rents the house out at $750/month clearing $300/month for an investment of the $1500 to me plus whatever amount the rehab cost was to him/her.  Or they sell the house and cash me out when they do. No penalty for early repayment.

I on the other hand have a nice note at a rate of 12% that I can keep or that I can resell all or a partial off of.