Table of Contents
Why Seller Carryback Is Back on the Table
In places like Tuscaloosa, Alabama, banks are tightening. Rates are high. Debt-to-income ratios are crushing deals.
But here’s the thing: sellers still need to sell. And creative investors know how to write offers that don’t rely on banks.
That’s why seller carryback financing (also called owner financing) is making a comeback.
As Pace Morby (author of Wealth Without Cash) says: “Every seller can be a lender — you just have to show them how.”
What Is Seller Carryback Financing?
Seller carryback is when the seller acts like the bank.
- Instead of demanding full cash, they “carry” a note for part of the purchase price.
- You make monthly payments to them, just like you would a lender.
- Terms (interest, balloon, down payment) are whatever you negotiate.
It’s flexible, fast, and in today’s market — a game-changer.
Real-Life Tuscaloosa Example: The Duplex That Almost Died
One investor in Tuscaloosa found a small duplex near the University of Alabama.
- Asking Price: $180,000
- Bank’s Answer: Denied (borrower’s income didn’t qualify).
- Seller’s Problem: Couldn’t move the property, wanted steady income.
The Creative Fix:
- Investor offered $20,000 down.
- Seller carried a $160,000 note at 6% interest with a 5-year balloon.
- Investor cash-flowed $600/month positive.
- Five years later, refinanced, paid off the seller, and kept $60,000 equity.
No bank. No delay. Just a creative deal that worked for both sides.
This is exactly the type of deal Jamil Damji (co-founder of KeyGlee) trains wholesalers to recognize: “Sometimes the money isn’t in the bank — it’s sitting in the seller’s pocket.”
Why Seller Carryback Works for Investors
- No bank approvals. Perfect for investors denied by lenders.
- Flexible terms. Payments and interest are negotiable.
- Seller wins too. They turn a vacant property into monthly income.
- Stackable. Pair with gap loans to cover the down payment or EMD.
Seller Carryback Financing: Risks & Challenges (Where We Help)
- Balloon payments. You’ll need a refi or sale when it comes due.
- Seller hesitation. Many don’t understand the structure.
- Paperwork errors. Bad contracts lead to disputes.
Our Solution: We help structure clean, legal carrybacks and provide gap loans so you don’t walk away when sellers demand more cash upfront.
Best Practices for Seller Carryback
- Educate sellers (in plain English).
- Always close through a title company or attorney.
- Keep payments affordable so cash flow survives.
- Use gap funding if the seller wants a larger down payment.
FAQs About Seller Carryback Financing
Q: Is seller carryback the same as owner financing?
Yes — just two different names for the same strategy.
Q: Why would a seller agree to carry financing?
Steady monthly income and potential tax benefits.
Q: Can I use seller carryback if my credit is bad?
Yes — approval depends on the seller, not your score.
Q: Does your company help with seller carrybacks?
Yes — we provide funding for down payments and deal structuring.
Q: What happens when the balloon hits?
You refinance, sell, or pay off the note with other capital.
