About 6 months ago I broke the proverbial real estate investment seal and bought my first investment property. I used a conventional 30 year loan, have renters, and am cash flowing $300 per month. I learned a lot along the way and am excited to finally see my efforts pay off. My goal has been to purchase one more property before the end of the year, so I've started to look at my options.
Although I have enough money saved up to replicate the process again and get a conventional loan, the idea of owner-financing is intriguing. I've spent a few weeks reading up about the concept thanks to Bigger Pockets, but I don't completely understand who I need to have on my "team" in order to make this process go smoothly, and in compliance with the law.
So this is where my question begins. Lets say I go on Craigslist tomorrow and find a motivated seller who owns his property free-and-clear and is interested in a 100% owner-financed deal (unlikely, yes...but i like to dream big!).
What steps come next? What type of professional assistance should I hire? and how much will it cost me? Here is what I have gathered from my research, but I'd love to get some real advice.
1) Appraisal / Licensed Appraiser / $200-$500
2) Title Search / Title Company / $ ???
3) SAFE & Dodd Frank compliant loan package / RMLO / $ ???
4) Sale Agreement / Realtor? or Real Estate Attorney? / $750-$1000
5) Payment Management / Loan Servicer / $ ???
I'd appreciate any assistance you can provide in order to flesh out this list. Thanks a ton!
Most title companies have a lawyer that can draft the paperwork and set everything up.
Another option is to look for a generic land contract/contract for deed which would need to be notarized by both parties.
You might also want to do a title search at the clerk's office or ask the seller to show a clear title to you.