Creative Deal Structure Game – How To Do This Without Cash or Credit

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  • Boomer couple lives in a two-story 4 bedroom 4 bathroom house. They want to move to one story two bedrooms, two-bath house closer to town now that their kids are grown and moved away. There is no mortgage on their house. It’s worth about $380,000. A bit dated but in good condition. They said they would take $350,000 for a quick sale but are open to creative offers too. They do not have a house picked out to move to… yet.

    They do not want to have a mortgage payment on the house they move to.

    How can you help them get what they want (1 story 2 bedroom house with no mortgage), and you get what you want (their 4 bedroom house) WITHOUT paying cash (or with very little cash), getting a loan, or using a private lender??

    What would you do?

    Find them there dream home. Tell the dream home seller to give the couple the house. You will give him a note and mortgage with payments on couples home.

    I am cheating on this one because I have literally heard Pete Fortunato talk about an example very similar to this one. I would go find them a house that matched their specifications that I could buy on creative terms. I would make sure it is all fixed up with new appliances, fresh paint and carpet, etc. and offer that house at full retail off their existing house and then create a note for any remaining equity I would owe them with monthly payments and no interest.

    That’s a good one Michael!

    You could also do substitution of collateral to move the note over to the two-story house so the one-story house the boomers move in to is free and clear. Then you make payments directly to the person who sold the one-story with seller financing. This way, the boomers don’t have to deal with receiving OR paying a mortgage payment. Having no mortgage is one of their objectives.

    When you find out what people ultimately need/want you can sometimes go find that instead of using cash.

    You’re basically taking cash out of the middle-man/woman position!

    Does anyone see any other ways to tackle this one??

    If you do marketing to people that have an over-65 exemption that lives in a two-story house, you’ll find a lot of opportunities!!

    BUT Still have to pay for the little house.
    I would make sure that once they agree to the 2BR, The seller will take back a note against their house I am buying. Also, they don’t need the money, so will they allow me to pay them little or no payment no until I pay off the seller of the 2 BR. OR will the seller of the two bedroom take half the up side of the new house as payment and let me pay off the boomers first?
    I love “Pete” Talk.

    Chris… this one is definitely “Pete Talk”

    s-t-r-e-t-c-h the creative deal structure imagination.

    Let’s say a Boomer couple wants to sell their house and wants cash so they can buy a new car. They already have another house to move into.

    Instead of paying cash for the house, you can buy that car for them then make payments on the car. and make monthly payments to them for their house.

    Always look for ways you can give the seller what they want which involves as little cash upfront as possible.

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