We have two properties that we came across through our DM campaign. Both would be great rentals to add to our portfolio. Both sellers are motivated and open to seller financing.
The way we are planning to structure the deal:
20 year amortization period at 5% interest
2 year balloon
10% down payment.
This will be our first time using seller financing and we want to make sure it is all done correct. Both sellers did not know about this option to sell their homes and are not familiar with the process. We want to make sure it goes smooth for them and us.
What documents should we use to draw up the agreement?
How do we create the payment schedule with a 20 year amortization period at 5%?
Once we have the documents in place and signed do we close at a local title company similar to all the other deals we have closed?
Have a signed purchase agreement for the property with the terms that you want for the seller fiancing Then go to this site https://www.docmagic.com/.
You would then find an escrow company in your area to do title and closing ,like fidelity or first american title.
We have not yet signed a purchase and sale agreement for the property. We are still in the negotiation phase. But it is going well.
So basically we would just outline the seller financing in the purchase and sale agreement?
How would we go about creating the schedule for payback?
just like you said 5% 20 year amortization, 2 year balloon, doc magic can help with that,or escrow
If it's a free and clear property it's an installment sale
I would go to www.IRS.gov and download the installment sale info
If it has existing financing you're looking at a subject to and a note, wrap or installment sales contract in MO
It really depends on what kind of existing financing, FHA or non-FHA
I would see an attorney experienced in seller financing
Lastly regarding Dodd Frank I would sign a paper that helps the seller stating that
"I have no intention of living in the residence and my intention is to rent it out to tenants"
Both properties are owned free and clear. One seller has borrowed a small amount to do a couple repairs but they did not borrow money against the house.
you can print your own amortization schedule from here
That is what I was looking for!
Now go wrap up this deal Good luck!!!!