Help! what is VTB?

[yaonchung]

Hi REIN members and Real Estate Investors.

I have just joined REIN today, although not shown yet on the forum.

Anyhow, I being looking reading Don`s books and it mentions VTB!
What exactly is Vendor Take Back? Come someone please explain it to me in plain english or have a example for me to make it easier for me to understand how it work.

Thank you so much
Look forward meeting you at next REIN event on 17th.

Luke Yao Nien Chung

 

[Thomas Beyer]

QUOTE (yaonchung @ Mar 31 2008, 06:08 PM) Hi REIN members and Real Estate Investors.

I have just joined REIN today, although not shown yet on the forum.

Anyhow, I being looking reading Don`s books and it mentions VTB!
What exactly is Vendor Take Back? Come someone please explain it to me in plain english or have a example for me to make it easier for me to understand how it work.

Thank you so much
Look forward meeting you at next REIN event on 17th.

Luke Yao Nien Chung

a 2nd mortgage that the vendor takes back ..

i.e. as part of an offer you (the buyer) agree to pay certain $s cash, certain $s as a 1st mortgage and certain $s as a 2nd mortgage from the seller at certain terms, say 15 months @ 10% annually, payable monthly or a 5 years term at 6% annually, payable quarterly, or a 3 year term @ 12% with no payment until 3 years from now with accrued interest .. i.e. you can be as creative as teh vendor allows you to be ..

The benfit to you: less cash required

The benefit to seller: he gets interest on money he lends you, he saves taxes as he pays taxes on the money only once he receives it in full from you (years later), or sometimes the only way to actually sell a property

btw: the seller is usually referred to as the vendor

btw 2: it is vendOr .. not vender ..

 

[yaonchung]

Thank you Thomas for the quick response!