How to Record Owner Financed Sold Property

[Blane Koenig]

Hello Everyone,

I have a property I just sold in Louisiana and I owner financed it. In Louisiana (Im not sure if this is every state) when you owner finance title does not transfer until the mortgage is paid in full or refinanced. With that said I am a little confused how to account for this property in my books. Is this simply a note that I claim the interest income or is it recorded the same as my other rental properties. Also if its just consider a note do I take the asset (property) off of my books? All advice is welcome!!

[Wayne Brooks]

Quote from @Blane Koenig:

I could be wrong but in the state of Louisiana the deed transfers but title does not. In a bank loan title does transfer. Again just my understanding I could be wrong. The property in question was sold with a "Sale With Mortgage". I also seen properties that was sold Bond for Deed (Louisiana term). Within the terms of that Bond for Deed it stated title will not transfer until debt is paid in full. With all that said that could have been just the terms of that Bond for Deed. Based on that document is why I believe this to be true. Louisiana is Civi Law and is different from most states...I will do some research and confirm this. 

The deed Does transfer title. In your case, title transferred, so you need to Record the mtg in the courthouse/parish records. This is “traditional” owner financing where your position now is just the same as any bank who made the loan.  Your mortgage is your only interest in the property.

As you mentioned, with a Bond For Deed or Land Contract the title does not transfer, but that is not what you did.