Using our Funding allows you to offer Owner Financing on your property. The way this works is you will qualify your property with us first by phone. You can then add owner financing to your advertising etc. We will step you through the entire process and work with you and the buyer all the way to closing. At closing, we buy the owner carried note offered your buyer at our previously agreed price. We discount the note so you will be paid discounted amount plus you keep the 10% down payment the buyer puts down and your agent gets their full commission. At closing, you walk away with all cash for your property, the buyer has a mortgage they pay us on. And we have a note with property as security. Everyone wins.
What is a Simultaneous Note Purchase at Closing?
The Simultaneous Close is a method of buying and selling property without using your investment capital to buy it first. Three transactions are occurring at the one closing. You are buying a property from a seller, you are selling the property to an end buyer, and you are selling the note to us.
Steps to Doing a Simultaneous Flip
The purchase is made using a typical “Purchase Agreement” or “Sales Contract” between the You and the Seller. Then a typical contract is used when selling the property to your end buyer but it needs a protection clause to allow you to pull out of the contract should you not be able to sell the note at closing. The Clause that will allow you to do this is:
This contract must also detail the owner financing details. If using a TREC Unimproved Sales Agreement, you would need to add the Seller Financing Addendum.
Example: You find a property that is valued at $100,000. The seller is willing to take $30,000 cash. You contract to buy it for cash with closing in 2-3 months. You advertise the property with owner financing. Sign a purchase contract with the buyer, take in at least $500 earnest money and have the buyer fill out the credit application, or you can do just the opposite and take the credit app first, then once approved, sign the contract with the buyer.
The contract and earnest money (EMD) is held by you if using an attorney or made out to the title company if using a title company. Have a clause in the contract that subjects the sale to approving the credit of the buyer if signing the contract before you take the credit application.
Any credit turndowns result in you returning the earnest money and canceling the contract, by informing the closing agent/attorney closer that they have not been approved. They will handle the cancellation for you.
Otherwise, an approved application results in continuing to a closing. Next have the title company arrange to have the seller sign the deed to you and have it ready for closing and funding. They will normally send a notary to have those documents notarized at the seller’s city. Notaries can visit their home or meet them at a local place for signatures.
At the closing, the buyer comes in and signs all required documents and we also come in with a cashier’s check or we will wire in the money used to purchase the note, that money is paid to the seller by the closing agent, usually sent by check or wired to the seller after closing occurs. We take the note and mortgage drawn up by the closing company. The additional money we paid the closing agent is paid to you. It also, can be sent to you by the closing company via a check or by wire to your bank account.