This deal started as something very ordinary.
It was supposed to be a simple wholesale assignment to a flipper. Instead it turned into a creative structure with multiple moving parts, a canceled buyer, a nervous seller, a balloon payment crunch… and ultimately a deal that will produce roughly $60,000 in total profit.
All without touching the house.
Here’s how it unfolded.
The Original Plan
We got this property under contract with the seller in April 2024.
The house needed repairs, so the plan was straightforward: assign the contract to a flipper and collect an assignment fee.
But after several investors walked through the property, the feedback became clear. The numbers didn’t work well enough for a flip.
Normally that means one thing: renegotiate the price or walk away. But by that point the seller had already bought another house and was carrying two mortgages. She was stressed and motivated to get the property sold. There was no room to renegotiate and we did not want to let her down.
So instead of trying to force a wholesale deal that wasn’t working, we got creative!
The Creative Solution
We restructured the deal in three pieces:
- We took over her existing mortgage subject-to
- We paid her some cash at closing
- We owner financed the rest of her equity
The numbers looked like this:
- Purchase price: $80,000
- Existing mortgage taken over subject-to: $44,000
- Cash paid to seller at closing: $12,500
- Seller-financed note: $23,261 with a 1 year balloon
For the first year we paid the seller $350 per month, all applied to principal.
This structure allowed us to control the property without bringing a large amount of cash to the table. Then we marketed the property to buyers willing to purchase on owner financing.
First Buyer… and First Problem
We found a buyer and went under contract on June 3rd, 2024.
Then the deal fell apart. During inspection something came up about a possible buried heating fuel tank under the house. The buyer got nervous and canceled.
By this point the seller had already been waiting months. Understandably, she was getting agitated.
About a month later we found a second owner financing buyer. The property needed repairs, but because he was getting the property below market value, he was comfortable taking care of the work himself.
The Structure of the Sale
We sold the property for $100,000. The buyer put $10,000 down and financed the balance with us over 10 years at 10% interest, paying $1,100 per month.
That down payment helped offset what we paid the seller at closing. We paid the seller $12,500 and collected $10,000 from the buyer, which meant our initial cash into the deal was only $2,500 plus closing costs.
At that point the deal looked solid. But there was still another twist coming.
The Balloon Payment Problem
The seller-financed portion of the deal included a balloon payment after one year.
Over the first 12 months we paid the seller $350 per month with 0 interest, reducing the balance by $4,200. That left a balloon payoff of $19,061, due in August 2025.
When we originally structured the deal, this didn’t seem like a risk. At the time our business was closing around four deals a month and generating roughly half a million dollars a year.
Then the business hit a rough stretch. Deals slowed down. Revenue dropped. We had to let three people go, cut hours for two others, and reduce expenses across the board just to stabilize things.
Right when the balloon payment came due… we didn’t have the cash!
We communicated honestly with the seller, paid small amounts toward the balance to show good faith, and offered late fees. Two months later, after closing several new deals, we were able to pay the seller off in full.
The Final Numbers
During the first year, the monthly numbers looked like this:
- Coming in from buyer — $1,100
- Mortgage payment — $632
- Payment to seller — $350
- Total outgoing — $982
That left $118 per month in cash flow while the seller-financed note was still in place.
Over those twelve months we paid the seller $4,200 toward principal, reducing the balance of her note. In August 2025 we paid the remaining $19,061 balloon payment and closed out that part of the deal.
Now that the seller note is gone, the monthly math is simpler:
- Coming in from buyer — $1,100
- Mortgage payment — $632
- Net cash flow — $468/month
The profit on this deal comes from two pieces:
Price spread — We bought for $80,000 and sold for $100,000, creating a $20,000 spread.
Interest income — The buyer financed $90,000 at 10% for 10 years at $1,100/month. Total payments over the life of the loan come to roughly $132,000 — meaning about $42,000 is interest.
- Price spread — $20,000
- Interest income — ~$42,000
- Total projected profit — ~$62,000
After closing costs and late fees, a realistic number is closer to $59,379 net profit over the 10-year term.
So we make about 60k on a property we bought for 80k, by being creative, thinking outside the box, and being willing to take some risks.
Takeaways
When a flip doesn’t pencil out, subject-to financing and seller carry-back can open up options that didn’t exist before. Creative deals tend to have more moving parts — this one had a canceled buyer, a stressed seller, and a balloon payment scare. And when things got tight and we couldn’t pay the seller on time, honest communication kept the deal alive.
What started as a failed wholesale deal turned into a long-term owner finance deal with strong profit and steady cash flow.
If you enjoyed this post, you might also like this one on how to buy via owner financing .
Also check out the Cool Wholesaling & Land Deals podcast on YouTube | Spotify | Apple Podcasts.
→ Download the Free Multi-Offer Calculator