I'm exploring some seller financing options on a 5+ unit multi-family so have a few questions I'm hoping some KIND SOUL who's been around the CFD block before can help answer...I promise to Pay it Forward!
1) Do Services exist to administer the paperwork
a) both the transaction (real estate attorney or someone else?)
b) The payment paperwork afterward and keeping track of money paid, interest...amortization schedules, etc...in other words, does a service exist that would be able to print out the mortgage bills that follow along with the amortization schedule. Who did you use/would you recommend?
2) The prospective sellers (husband and wife) are both elderly, so with a longer amortization schedule (targeting 25-30 years) that will outlast their lives, how do the mechanics look upon their deaths (CFD being transferred to next of kin for example). How should this be presented this to the sellers...(they haven't done a CFD in the past).
3) Do you have any other general advice regarding CFD?
Although I've not done a CFD myself I do have 10 years experience in the title insurance industry and can tell you I would not pursue a CFD for an investment property purchase. A CFD is essentially putting the property on "layaway" and only provides equitable interest in the property, not any type of Fee Simple interest. I would try to negotiate a seller-finance situation where they are actually providing a Warranty Deed on the property and you would have an attorney draw up a basic mortgage contract lining out the details of the financing.
That being said, if you are dead-set on a CFD then you would have the contract drawn up by a real estate attorney and you could have an escrow account set up with a 3rd party to process the payments.
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