Seller financing - recommended in general or not?
I have done two land contracts in the past before the whole Dodd-Frank legislation came up. One has worked out well and the other did not.
I still feel that there are opportunities to provide win-win scenarios where I make money and the buyer gets an affordable home.
However, considering the Dodd-Frank legislation, is seller/owner financing recommended anymore, if you're only doing 1 or 2 per year?
Or is that something that people doing so few transactions should stay away from?
Here's an example I'm considering:
Duplex 2/1 lower, 2/1 upper. Area rents at $600 lower, $550 upper.
FMV = $40k - $45k based on comparable recent sales
My thought would be to put the sale price at $40k, with $2,000 down and payment of $600 a month over 10 years at 10%. The payment would include an "escrow" for property taxes (to insure they would get paid). The property would be rehabbed before the buyer bought it. Repairs that come up after the buyer purchased it would be on them.
Am I thinking correctly in how to structure an owner finance like this? Or are my numbers off?
When someone seller finances, do they generally use a servicer or be the servicer themselves?