Owner Financing Primer
This specialist in buying high, targets sellers who are reaching the end of their listing period with their Realtor and are clearly unwilling to accept the reality they are over priced. Typically they have turned down offers and can't seem to recognize their place is not priced competitively. The Realtor is motivated because he knows he will soon loose the listing.
The offer has to allow the buyer to profit from fix up and resale on a contract to a new buyer. We are talking about the typical 3 bedroom, two bath "bread and butter" house. The monthly payment for the new buyer must be affordable or the home won't sell.
So, what are the choices when the sellers price is above market. My friend handles this by offering terms. He will meet the price requirement but ONLY if the sellers will carry back owner financing at a rate that lets him keep the overall monthly payment affordable.
He will not put enough cash down to lower the payment that way.
It doesn't always work, but he is able to buy six-eight homes a year doing this. Since the payments are always affordable he has few problems with default.
In addition, since he is creating a contract on which he pays and also creates a contract which pays him there are always future opportunities to pay off his debt for a discount and/or to get paid early on what is owed to him.
It sounds easier than it is, and requires good negotiating skills.