Sellers with Little Equity

Here is my offer on your property when you need to sell NOW

This offer is for folks who have been unable to sell their house or apartment building by themselves and they do not have enough equity or cash to pay for Realtor fees.

This is a very common situation. It does NOT necessarily mean that you are broke, or poor, or even in some kind of distress. It means that you bought a property, got a mortgage loan on that property, and the value has not gone up enough to create the equity to pay the real estate agent to list the property on the MLS (Multiple Listing Service).


Let me explain that most folks may not know how much selling a property the traditional way actually costs. Suppose the fair market value of the property in its current condition is about $200,000 and there is an existing loan on the property for $160,000. The equity appears to be $40,000, but there are other costs to consider. The gross equity may be $40,000, but the net equity is your real concern.

In this hypothetical situation, suppose a Realtor can find a well-qualified buyer with 20% down payment who will pay $180,000 (that’s just 10% less than fair market value). Considering the time constraints, the seller would probably accept that offer. Now, let’s look at numbers:

Property Sale Price   180,000
Commission Fee 6.00% –10,800
Closing Costs 1.00% –1,800
Buyer Incentives 3.00% –5,400
Holding Costs 1.11% –2,000
Repair Credits 0.00% 0
Back Taxes and Liens 0.00% 0
Existing Debt 1st 88.89% –160,000
Existing Debt 2nd 0.00% 0
Existing Debt 3rd 0.00% 0
Prepayment Penalties 0.00% 0
Reinstatement Costs 0.00% 0
Net Sale Proceeds 0.00% 0

Can you see that a 10% reduction in the gross sales price produces no net equity for the seller? What if the buyer finds problems with the property and needs a repair credit? What if the seller is behind on some payments? Many sellers are unable or unwilling to bring cash to closing to cover all of these expenses.


Here is my offer…

Remember, I am a professional real estate entrepreneur with a group of experienced property owners. My group and I have done this countless times. My group wants me to find good properties in good neighborhoods. You will negotiate only with me, not some faceless committee, because I make the final decision whether to buy your property.


I can arrange for a bank collections department to collect the total payments and then to disburse those payments to the lien holders. If a payment is missed, then the bank will immediately notify all lien holders and you. The bank will also provide periodic statements, and you can always check the account status online. You will always know what’s happening with the loan.


I will buy your property by taking over the payments on the existing mortgage loan. This means that your existing mortgage loan on the property will stay on the property after I take title to the property. Professionals clean the property, if needed, and then rent out the property to a good rental tenant. The rental income will pay for the mortgage loan, pay for the taxes and insurance, pay for any repairs, pay for the management, and to pay a fair monthly income.

The rental income pays your mortgage loan until the loan is cleared, or the property is refinanced, or until the property is sold to a buyer who can provide new financing at closing.


Sometimes I can find a buyer with good income who can pay your monthly mortgage loan payments until they can refinance with a new mortgage loan to pay off your mortgage loan. The buyer has an “owner mentality” who wants to own the property now. In that case, I will directly assign my contract with you over to that buyer who takes over the payments on the existing loan and the payments on your equity.


You will not have anything to do after you sell the property. Professionals will take care of everything. That means professionals are finding the good tenant, paying the mortgage loan payments from the rental income, paying the taxes and insurance, paying for repairs and management, and paying a fair income, all from the rental income.

That is what real estate investors call selling your property “subject to” the existing loan. You are selling your property for the existing loan balance, and professionals are finding a good rental tenant to make the payments and to take care of the property. This is a little known method for transferring ownership of property, and it is legal and ethical. There is even a line on the US Federal government’s HUD-1 settlement statement to account for this kind of ownership transfer, as required by federal law.

I’d be happy to answer any questions that your attorney may have about the process, if they are not up to speed on it.

Since you don’t have any real equity, you would not receive any money for the property at closing, but you would not have to make any more mortgage loan payments after I take over the property.

Here is WHY I buy properties like this and why it makes senses for you

I can close when YOU are ready. If you need to close right away, I can do this in as few as 7 business days. If you need to wait a while, that’s not a problem either. Just let me know when you want to close and I’ll be ready.

After I sign the simple paperwork with you to purchase your property, you won’t have to do anything else. The property manager finds a good tenant and handles everything.

You will NEVER have to deal with that tenant and you will NEVER have to deal with that property after you sell it. Professionals take care of everything, and you are completely out and free to get on with your life.

You are never required to make another payment to the lender. Professionals ensure that the rental income from the good tenant is sufficient to cover everything, including the mortgage loan payments as you originally agreed with the lender.

The property is rented to a good tenant until it has enough equity to sell it for a conservative profit. Until that time comes, the rental income pays your mortgage loan, pays for repairs and management, pays for taxes and insurance, and pays a fair net income.

My group and I make money by managing the property as an investment for rental income, keeping it in good condition and being patient until the equity grows large enough to sell for a conservative profit. Professionals manage everything, so you can get on with your life and not have to deal with it anymore.


Sometimes I can find a buyer with good income who can pay your mortgage loan until they can refinance with a new mortgage loan to pay off your mortgage loan. In that case, I will directly assign my contract with you over to that buyer who takes over the payments on the existing loan and the payments on your equity.


This is a very simple process that takes about 7 business days to close. All you have to do is sign the deed over to my company. You can do this when you are ready to move out, so if you need more time just let me know when is the best time for you to close.

Please be aware that the mortgage loan stays in your name until it is paid off. The rental income covers the payments, but your name stays on the loan. This may seem like a concern, but when you look at how it all fits together you’ll realize that it is not as risky as it sounds.

Here’s why…

1. My group and I take over many properties this way, and professional property managers make sure that the properties have good tenants and are maintained in good condition.

2. My bookkeeper and my Certified Public Accountant (CPA) make sure that all of the mortgage loans, taxes and insurance, repairs and management bills are paid on time and in full.

3. My group and I have ample cash flow from all of the other businesses to cover the mortgage payment on your property in the unlikely event that the tenant moves out earlier than expected and I need to find another tenant.

4. My group and I have many general contractors, licensed and insured, who can perform quality repairs as time goes by.

Here are the criteria of properties that I am buying right now

1. The current value of the house must be between $250,000 and $5,000,000 (I sometimes buy higher or lower value properties). Apartment buildings may be higher valued and I will determine the value according to the cost and structure of financing.

2. The mortgage loan combined amount of all loans on the property must be less than the current market value.

3. The mortgage rate must be less than 7% per year for the remainder of the loan term, and at least 10 years remaining before the loan is due to be paid off with a balloon payment or the loan must have no balloon payment at all (that’s called “Fully Amortizing”).

4. The property must be in “rentable condition”. If you aren’t sure about this, just tell me what are the apparent major defects and I let you know whether that’s a problem.

5. The mortgage loan payments must be current. I will prorate the interest to the day that I take title to the property.

6. At this time, I am not buying Mobile Homes, Condominiums, Townhomes, or Manufactured Homes, just houses and multifamily properties, and I never buy in blighted or war zone areas. The property must have city water and sewer.

That’s it! I am not very fussy. My group and I buy in “as is” condition, as long as the condition is reasonable. I don’t mind a little dirt, because I will bring in a professional cleaning and repair crew before I rent out the property. You won’t have to pay for repairs, Realtor costs, or closing costs. I won’t beat you down on the price. You also won’t have to make any more mortgage loan payments after you sell the property.

What really matters is whether the market rents are sufficient to pay for everything, including a conservative net income after paying the mortgage loan payments, paying the taxes and insurance, and paying for repairs and management. If I can’t make the deal with you because the market rents are too low, then I’ll inform you honestly and up front. I won’t jerk you around, because it’s just a waste of your time and my time. I will know this before I sign the deal with you, and it’s my responsibility after you and I close the deal.

If you are interested in selling your property “subject to” the existing mortgage loan, then please fill out the form by clicking here and I will call you to discuss your options.

Frequently Asked Questions

1. Can I still get another mortgage loan to buy my next property when this mortgage loan is still in my name?

The short answer is YES. Mortgage lenders will see this loan on your credit report, but will consider it a sale rather than a liability. As long as you have good credit, which is always required for mortgage loans, they will not count this loan against you as a debt and it will not affect the amount that you can borrow for your next purchase. You can confirm this by calling any mortgage lender and asking them about it.

2. I have equity in my property and I want to get something for it.

If you have much more than 10% of real equity in the property, then you should look at the “GREED” category. Just click here to go to that page.

If you have 10% or less equity, then that equity will be consumed when you sell the property through a real estate agent. Most folks in this group have less equity than it would cost to sell the property. They must come to closing with extra cash to pay someone to buy the property. That’s why they call that small equity “Realtor Equity”. The equity only exists when you can successfully sell the property as a “For Sale by Owner” (FSBO).

By the way, it is possible as a FSBO to get some of this equity at closing, but you are still responsible for paying closing costs, carrying costs while waiting for a buyer, negotiating on the price and paying for repairs. On average, about 85% of all FSBO fail to find a buyer that can provide all cash to the closing.

3. My mortgage loan has a “due on sale” clause. If I sign it over to you, will the mortgage company foreclose?

About 99% of all mortgage loans have a standard “due on sale” clause written into them. That gives the lender the option, but not the obligation, to accelerate the loan and get paid off. When the loan payments are kept current, the last thing the lender wants to do is stop that cash flow and gain a liability of a non-performing loan or worse, a vacant property. Thousands of houses have been bought subject to the existing loan and the lender has allowed the conveyance.

Lenders are in the business to receive payments on their loans, not take back properties, especially properties with little or no equity. It just doesn’t make financial sense for lenders to cancel that income stream and foreclose on the property. Lenders have credit scores, too. Taking back too many foreclosed properties damages their credit and impairs their ability to make new loans. Lenders DO NOT WANT to foreclose on your property, especially when the payments are current. With over one million properties foreclosing this year for default, why would any lender want to foreclose on a performing loan and further damage their own credit?

Alright, I want to sell to you my property. What should I do next?

Just click here and fill in the requested information in the form. You can also ask questions in the space provided. I’ll look over the information and call you. Remember, you have no risk or obligation when you inquire about selling your property to me. You decide whether and when to sell your property to me after I make a formal offer to you.