WLCCI

This technique works well when the seller owes nothing on the property or when the amount the seller owes is not greater than 40% of the value of the property; however, you must have a flexible seller who is willing to help finance the property.

For example, assume the seller of a $50,000 house has an existing loan of $12,000 is looking for a $15,000 down payment and is willing to carry the financing for the balance of $23,000 ($50,000 minus $12,000 minus $25,000).

Simply obtain a new first mortgage for $27,000 which can pay off the existing $12,000 mortgage and give the seller $15,000. Next, give the seller a second mortgage in the amount of $23,000. The $27,000 first mortgage plus a $23,000 second mortgage gives the seller his or her total asking price: $50,000

A seller who may be initially reluctant to accept this offer may ultimately agree to accept an offer with more cash up front. For example, obtain a new loan in the amount of $5,000, giving the seller an $8,000 larger down payment than expected, or a total of $23,000 ($35,000 new mortgage proceeds minus $12,000 old mortgage pay-off).

Some sellers have even been known to join the buyer in signing a note and mortgage at the bank. If the buyer does not have sufficient credit to get a new mortgage, the seller in effect loans his or her credit to the buyer.

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