I am looking at a home for sell by owner and the owner is offering owner financing. I have not been in the home yet I will be looking at the property next week. If every thing looks good to me I will have the home inspected.
My situation is I can not get traditional financing at this time. So I have been looking at for these types of investments for a while and have not found one that suites me until now.
My question is if every thing looks good and I decide to move forward, What do I need to do to protect my self. I have never done this type of transaction before and I am nervous and skeptical of this process. Example what if I make payments to owner/lender and upon final payment they decide not to deliver deed. I have realized that i do not know enuf to move forward with confidence.
What are the do's and dont's? And what should I do first.
You should do a title search and see if there are any liens on the home and ask the seller is he in pre-foreclosure.
Welcome to Bigger Pockets
As time has passed I have realized that these types of deals are everywhere. There are many highly motivated sellers looking to just get rid of their properties. It looks like you will be dealing with "subject to" financing. Here is a link i found for you here on bigger pockets. It will allow you to understand this type of financing and how to put it together. I will see if i can find some contracts for you to use
Have a good 1
Use an attorney. This will ensure that the deed to the property is recorded in your name at the court house, so there is no question who the owner is. The seller will have a lien on the property, just like a bank would. Once you pay off the property, the lien is removed, but in the meantime, you as the owner of record can sell the property, get a HEL, rent it out, etc.
I will tell you, I have never known anyone to actually rent to own a property that resulted in them owning it. It is rarely successful.
Thanks Gerald and Anthony
Iam fairly new to BP, and the community here is great. I want to say thanks for the quick reply. I did not know that the house would be put in my name or a lean to be placed on the property to protect the seller.
I do have another question where should I go to have payment made through a third party or do you just make payments to the seller.
First you need to analyze the property to make sure it even makes sense as an investment. When you say you are looking for these types of investments I assume your not going to be using it as a primary residence? What are your plans with the property? I'm not familiar with that area of ND but if its like most of the other small towns, and not near oil take into consideration rental prices and demand. I used to rent from a small town landlord in North Dakota who had 5 rentals, no more than 2 were ever occupied at the same time and his rents were under $300/mo. I don't intend to scare you off but make sure you do some research first. If you decide that it is a good deal, close with an attorney and he will make sure everything is legit.
hey Dominic, I work for a company that specializes in helping people in your exact situation. If you want some info feel free to contact me, 352-895-5224. We are real estate investors and we have a lot of people like you!!!
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