Jake buys Shannon's property by taking over her $380,000 mortgage and paying $400,000 total. The $20,000 difference gets formalized as an IOU through a title attorney, paid monthly over time. This structure lets investors buy properties with minimal cash at closing.
Yeah, so in basic terms, say your mortgage is at $380,000, right? So $380,000, we're going to leave that mortgage intact. We just take over the payments, right? Everything's fine there. What we're going to do, for example, right, say we bought the property for $400,000, just for an example, right? That leaves $20,000 of equity, right? So what's going to happen is at title, the title attorney is going to draft up pretty much an IOU, I, Jake, owe you, Shannon, $20,000 over X number of years, right? It might be 5 years, might be 10 years, whatever, right? And you're going to get a monthly check every single month for whatever amount that you need, right? $1,500, $1,700, $2,000, whatever works out. And that's how the sale of the property takes place, right? Now, the reason it's beneficial for us is because, like I said, for cash, we'd have to be down in the $300s, right? But if we're able to do this method, it allows us to bring less money to the table so we can actually get in and have it make sense.
