Give the seller the price. Take the terms.
Full price. Your terms. Cash flow that pays for itself.
A step-by-step breakdown of the Morby Method — the creative-finance structure that blends seller financing with DSCR or private capital, so you can offer close to full price on a property and still walk into the deal with little or none of your own cash at closing.
The core idea
You do not always need your own money to buy a property. You need the right deal, the right structure, the right financing, and the right team. Instead of negotiating the seller down on price, you offer close to what they're asking — and negotiate the terms that make the numbers work for you instead. That single shift is the whole method.
Senior financing
A DSCR loan or private capital covers roughly half the purchase price — the portion a lender is willing to stand behind.
Typically ~50% of priceSeller note
The seller carries the rest as seller financing — commonly a 5-year balloon, extendable toward 8 years if the deal or market calls for it.
Typically ~50% of priceSeller equity
In some deals, the seller keeps a small stake instead — often around 5% of the LLC — depending on how the transaction is structured.
Deal-dependent, ~5%This is a guideline, not a formula. Most deals — call it 90%+ — land close to this structure. But every property, every seller, and every lender is different, and the numbers have to work for that specific deal, or the structure isn't worth forcing.
What kind of deals work
The property and the seller both need to fit before this structure makes sense.
- Significant equity — 50% or more. That's what gives a seller room to carry a note and still walk away whole.
- Time on market, 60+ days. A property that's been sitting is a seller who's usually more open to creative terms than a fresh listing.
- Pre-foreclosure, or a real deadline. Motivation from a timeline — not just a price problem — moves conversations faster.
- Terms over price. The offer leads with something close to full asking price; the negotiation happens on the terms behind it, not the number on the contract.
How cash at closing can happen
This is the part that gets attention — and the part that has to be handled exactly right. Here's a simplified example of where it comes from.
If the seller is carrying $250,000 and the approved senior loan is $300,000, there's potentially $50,000 of additional financing capacity built into the structure — usable, when properly disclosed and permitted, for things like repairs, reserves, furnishings, or other legitimate transaction costs. That's where the idea of getting paid at closing comes from: capital controlled through the transaction, not money that came out of your own account.
That $50,000 is potential financing capacity — not automatically free money. Whether cash actually comes out at closing depends on the lender's rules, the lien structure, the closing statement, the seller note terms, and what the proceeds are permitted to be used for. Treat it as something to structure toward, not a number to plan around before it's confirmed.
The lender must know
Creative financing works when it's transparent. This is the one part of the Morby Method that is not optional.
Never hide the seller financing from the senior lender. If the seller is financing part of the price, or carrying a second-position note, the DSCR or private lender needs to know — and needs to approve the structure before closing.
The closing agent, title company, and any attorneys involved should understand exactly how the deal is put together. Misrepresenting the source of funds, or concealing a seller-financed note, isn't a gray area — it's exactly what full disclosure exists to prevent.
- Disclose the full structure to the lender, in writing, before closing.
- Get lender approval for the seller-financed piece — not just a heads-up after the fact.
- Never misrepresent the source of funds on the closing statement.
- Loop in a real estate attorney and CPA before finalizing seller-note terms or any equity-retention piece.
Cash flow still comes first — and it's not just houses
The financing gets you into the deal. The cash flow is what keeps you in it.
The same structure can apply to single-family homes, multifamily, commercial property, even small businesses — the tools shift by asset type, but the principle doesn't: find the equity, find the motivation, structure the terms, use leverage intelligently. Whatever the asset, income still needs to cover the senior debt, the seller-financed payment, taxes, insurance, maintenance, and a reserve — with real cash flow left over. If it doesn't, the structure isn't the problem to solve; the deal is.
You don't need to master every closing document or lending guideline before you start. You need to recognize the opportunity, and bring in the right title company, attorney, lender, and CPA at the right moment.
This is module two
The Morby Method builds on the same core idea as subject-to: control the asset, structure around what the seller actually needs, and paper it the way an attorney would sign off on. More modules get added here as we build.