Many builders in the Houston TX area will occasionally reduce some inventory homes for the weekend by 15-20%. I know of one person who has grabbed a bunch of these. This is what he says he does:
example- buy a 150K home for $120k (20% reduction) Then will put back on market for $153k
and carry a 20% 2nd on it. This way when sold his loan for the $120k is pd off and he profits from the 2nd note. In this case he carries a note for $30,600 (20% of the $153 sales price) at 10% interest only for 10 yrs then note due.
Over 10 yrs this doubles his initial 2nd.by giving him $255/month for 10 yrs is 30,600 then the 30600 is due. When sold fast he had no out of pocket money and will get over $61,000 over the 10 yrs. This seems much better than rentals with barely any cash flow and having to do the repairs etc.
Now imagine doing 3 or 4 a month. with 4/month
you would end up with over $12k/ month income in a yr and in that big 10th yr banking over 120k/ month on the balloons.
Does anyone have any thoughts on this. Almost sounds too good to be true. Focuses on buyers with good credit but no down payment money.