Simultaneous Closing Examples

Example #1

Mr. Smith inherited his home from his mother and has decided to sell it. This house has been paid off for 10 years, has no underlying liens, and is in good condition. Mr. Jones decides that he would like to buy Mr. Smith’s home via owner financing. With a credit score of 600+ Mr. Jones is in good standing. It is a Single Family Owner Occupied Home (SFOO)!

The LTV is 95%

The Note will be structured as Follows:

1. Interest Rate of 9%
2. A Term of 360 months with a 60 month Balloon
3. There are no points and no pre-pay
4. Pinnacle Investments will pay $ 86,450.00 + $ 5,000.00= $91,450.0(Seller keeps the down payment)
5. Closing Costs are estimated at 1.5% +/- for a deal of this nature. They can be paid by the house buyer or the house seller.


The Standard items found under the closing cost include:

• Appraisal
• Lenders Title Policy
• Escrow Fee
• Recording Fee
• Overnight Fees
• Wire Fees
• Document Preparation Fees

Non-standard items would include:

• Any other underlying liens
• Judgment
• School Taxes
• Government Taxes
• Property Taxes
• Hospital Taxes

These non-standard items along with any other citations found by the title company would have to be paid off before closing the deal.

Example #2

Mr. Sellers is selling his 4 duplexes and single family residence (all of which are in good condition) to Mr. Morgan. There are no underlying liens or tax issues and Mr. Morgan’s credit is 745+. He has decided to purchase these properties through owner financing as investments; they are 50% occupied.

The LTV is 95%


The Note will be structured as Follows:
1. Interest Rate of 6%
2. A Term of 360 months with no balloon
3. There are no points and no pre-pay
4. Pinnacle Investments will pay $ 184,000.00 + $ 10,000.00= $ 194,000.00 (Seller keeps the down payment)
5. Closing Costs are estimated at 1.5% +/- for a deal of this nature. They can be paid by the house buyer or the house seller.

The Standard items found under the closing cost include:

• Appraisal
• Lenders Title Policy
• Escrow Fee
• Recording Fee
• Overnight Fees
• Wire Fees
• Document Preparation Fees

Non-standard items would include:

• Any other underlying liens
• Judgment
• School Taxes
• Government Taxes
• Property Taxes
• Hospital Taxes

These non-standard items along with any other citations found by the title company would have to be paid off before closing the deal.

Example # 3

Mr. Wilson is a rehabber and wants to sell his properties fast so he can offer owner financing to bring in numerous prospects. Note: The buyers have damaged credit and have agreed to a high interest rate loan, in the hopes of reestablishing credit. Buyers normally have a chance to refinance at a lower interest rate if they make their payments as agreed for at least one year. This type of transaction can thus be a solid win-win situation. Mr. Wilson will carry back the second position note.

The LTV is 85%

The Note will be structured as Follows:
1. Interest Rate of 10.5%
2. A Term of 360 months with 120 month balloon
3. There are no points and no pre-pay
4. Pinnacle Investments will pay $ 76,000.00 + $ 5,000.00= $ 81,000.00(Seller Keeps the down payment)
5. Mr. Wilson keeps the additional second position note at $10,000.00.
6. Everyone wins with Owner Financing. Mr. Wilson gets cash up front at closing for payments that may never materialize, the buyer gets a property he could not otherwise purchase and Pinnacle Investments in turn collects the mortgage payments from the buyer.
7. Closing Costs are estimated at 1.5% +/- for a deal of this nature. They can be paid by the house buyer or the house seller.

The Standard items found under the closing cost include:

• Appraisal
• Lenders Title Policy
• Escrow Fee
• Recording Fee
• Overnight Fees
• Wire Fees
• Document Preparation Fees

Non-standard items would include:

• Any other underlying liens
• Judgment
• School Taxes
• Government Taxes
• Property Taxes
• Hospital Taxes

These non-standard items along with any other citations found by the title company would have to be paid off before closing the deal.

Example #4:

Let’s say that Ms. Penter owns a property, but because it’s not a conforming lot, it is having problems getting qualified buyers. Buyers don’t seem to consign to the purchase and the ones that do, don’t get their mortgage approved by the Bank and have poor credit. Ms. Penter decides to advertise the house at a sales price $10,000 below the appraised price, but not even this price is attracting real buyers.
Pinnacle Investments then steps in and advises Ms. Penter to create this owner financed note:

The LTV is 90%

The Note will be structured as Follows:
1. Interest Rate of 9.5%
2. A Term of 360 months with payments at $756.77 a month
3. There are no points and no pre-pay
4. Pinnacle Investments will buy the note for $ 81,000.00 + $ 10,000.00= $ 91,000.00(Seller keeps the down payment)
5. After this note has been put in place, Ms. Penter happens to notice that there are numerous amounts of prospective buyers. She then decides on a buyer (one whom she believes will make the monthly payments), and her home is now sold. Pinnacle Investments then helps Ms. Penter close the deal and the only money that needs to be dispensed by either the buyer or the seller is the closing cost fees and any outstanding liens or other fees put against the house.
6. Closing Costs are estimated at 1.5% +/- for a deal of this nature. They can be paid by the house buyer or the house seller.

The Standard items found under the closing cost include:

• Appraisal
• Lenders Title Policy
• Escrow Fee
• Recording Fee
• Overnight Fees
• Wire Fees
• Document Preparation Fees

Non-standard items would include:

• Any other underlying liens
• Judgment
• School Taxes
• Government Taxes
• Property Taxes
• Hospital Taxes

These non-standard items along with any other citations found by the title company would have to be paid off before closing the deal.