What Is a Balloon in Real Estate?

What is a balloon in real estate? Today’s video features Pace Morby giving an in-depth explanation of what a balloon is in terms of real estate investing. He describes what it is and the logic behind it through various examples of seller finance deals and what the payment process looks like for both the seller and real estate investor. He helps break down how balloons work through an example of a 30-year payment schedule, with a balloon at the 10-year mark.

What happens after the balloon ends? Pace explains the different options for what can happen once the balloon term is over. He goes over three options for what the investor can do after the balloon ends: sell the property, refinance, or even negotiate with the seller. He also discusses a balloon extension clause, which is an agreement to extend the balloon if the property can continue to appraise and cash flow. Pace emphasizes that anything could happen when balloons are structured into a deal, and to understand what your options are during and after the life of a balloon.

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❎ I am not a CPA, attorney, insurance, contractor, lender, or financial advisor. The content in these videos shall not be construed as tax, legal, insurance, construction, engineering, health & safety, electrical, financial advice, or other and may be outdated or inaccurate; it is your responsibility to verify all information yourself. This is a YouTube video for entertainment purposes ONLY ❎

Видео What Is a Balloon in Real Estate? канала Pace Morby