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Private Lending & Conventional Mortgage Advice

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Mike Hartzog
  • Lender
  • Redmond, WA
489
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553
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Doing Owner Financing Correctly

Mike Hartzog
  • Lender
  • Redmond, WA
Posted Feb 26 2015, 19:27

I am a mortgage note investor and end up with a fair number of non-performing notes.  A percentage of these will turn in to REOs.  I typically sell my REOs off-market for cash to investors or on-market in the conventional manner, depending primarily on property condition.

I would like to begin offering some owner financing on the off-market investor sales to help the investor get in easier with less cash up front. I am thinking of doing a non-recourse loan with a longish amortization and a balloon a year two out. This type of thing seems to me to be very similar to a standard PML/HML funding of a fix and flip deal, the difference being that I am also the seller. I thought this group could help me understand the proper process to follow.

If I were originating a consumer loan, I would use an RMLO.  My understanding is that this is not necessary with a commercial non-recourse loan.  So my question is, what are the steps required to get the deal done once I have a buyer lined up and vetted?  My best guess at the moment is that I would execute a PSA with the buyer and then use a title company to create the note and security instrument, issue title policies, and record the deed and security instrument.  What am I missing?

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