If you are having problems making your deals cash flow or if you are looking to structure some real sweet terms you may want to check out an over looked and untapped list called “free and clear “leads.
Free and clear basically means that the seller owns the house “free and clear” he owns nothing on the house (or a very small amount) and can sell it however he would like. He is not tied to paying off a mortgage, therefore opening up the deal to more creative terms.
Imagine getting terms on a house that REALLY make you excited. Let’s look at some examples of how you could structure a deal on a free and clear seller lead.
Lets say a seller calls he and his wife are in a house that is too big for them now that there children have all moved out and would like to sell. After you spent some time pre-screening them you find out that the house is free and clear and the sellers are planning on renting a small condo out of state until they find what they are looking for. You also figure out that the house is worth 100,000 and needs no repairs. You make them two offers.
1. “If you need all your cash right now, Mr, Seller, I can pay you $60,000 and close when ever you would like.”
2. “On the other hand Mr. Seller, if you could wait on your equity I could pay you a much higher purchase price of $80,000 and make you monthly payments in the amount of $500.00 for the next 4 years. At the end of the four years I will pay you the balance in full. How does that sound?”
If you notice I didn’t offer interest on the payments or a down payment. I would let the seller ask me for the interest and the down payment, and some do…most don’t. Either way this would be a good deal for you.
Let’s look at the end result if the seller took our 2nd offer.
Purchase price $80,000
No interest payments for 4 years@ 500 monthly = $24,000 price reduction.
Total due seller in 4 years = 56,000
Resale value in 4 years @5% increase in value $121,550
Total Profit from deal after 4 years = $65,550
Now this is assuming you had a tenant buyer in the house every day for four years, which you may or may not have. But even if you adjust your numbers down by 5,000 you’re still looking at $60,000 profit, and we haven’t even tried to discount the note with seller when we payed it off yet:)
Free and Clear Sellers are able to be more flexible and more creative on the sale of their properties. Start your Free and Clear Campaign TODAY by calling 1-888-294-0780 or Reading more Info on Highly Targeted Mailing Lists.
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