Big And Rich With Equity
"Low Hanging Fruit" - Cash Creation Strategy
When the sellers home value is big and rich with equity, it is also known as being house rich and cash poor.Their big and rich with equity home motivated the sellers of this $300,000 four bedroom, three bath home to capitalize on the riches contained in their property. Being "empty nesters" had resulted in a few changes in everyone's life. One day it just made sense to accept the offer of a full price sale. The 10% down offered was OK, but they preferred 20% down to really lock in the deal.
The big and rich equity amounted to 79% or a mortgage balance of only $23,700. They needed enough money to pay off the mortgage balance and cover their relocation expenses. The rest of their equity would be recovered as income. The buyer's debt to income ratio was too high for the lenders that had rejected his application. Further discussion with the buyer revealed: He was an active professional contractor
His credit card debt was unusually high because of a short term investment
He had $30,000 for the down payment
He was willing to be flexible with the structure of the deal
Our Realtor associate contacted us to see how we might handle the big and rich with equity situation. After a thorough review with the sellers and the buyers, we created a promissory note for $270,000 for ten years at 8% interest. The monthly payment was $2,258.39.Here are the terms of the deal we created: The sale price of the property will be $300,000.
The Seller will receive $30,000 from the property buyer as the down payment at the close of escrow.
The Seller will also receive $35,000 from the partial note sale at the close of escrow.
Total cash the Seller will receive immediately is $65,000.
The Seller will also receive 120 monthly payments of $2,258.39 for a total of $271,006.80.
When the balloon note matures in ten years the note balance will be $42,666.13, which the seller will also receive.
The total amount the Seller will receive for your $300,000 property sale is $378,672.93!
The seller actually received a 21.67% down payment and the discount was only 7.09%.Using the "Low Hanging Fruit" strategy the seller got much more than expected. The Realtor got a very nice commission, and the buyer could not have been happier. Even though we may apply the same strategy, the circumstances of the parties involved insure that every transaction is different, or customized. If you are a Realtor or real estate professional you may want to get over to Realtors to start taking advantage of your soon to be obtained "competitive edge".
If you have a property that is big and rich with equity
just complete a Seller-Profile so we can determine what your financial needs are. If you have a buyer that needs some financing help, that's good too. Just have them complete a Buyer-Profile so we can make sure we understand their needs and capabilities as well. High equity property sellers and the "low hanging fruit" cash creation strategy is one of more than 169 ways for property sellers to finance a property. Our E-book, "How To Sell Your House FAST In Good Or Bad Markets" gives you incredible insight into the world of promissory notes and the time value of money. It's priced at only $14.95 for a limited time. Be sure to add a copy to your home library. You'll be glad you did. It's available in an easy download. Details are available in the link above. If you need more convincing about our ability to create customized solutions that result in win-win solutions, just look at these note sale solutions.
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