What contracts are necessary for owner financing deal?

3 Replies

As the subject suggests, I'd like to know what contracts are necessary for an owner financed fix/flip deal? Let me outline the situation.

I'm buying a fixer upper from a distressed seller in the state of North Carolina. She's agreed to sell me the property which she owns free and clear through owner financing. I plan to buy the property from her for 37K and put down 7K towards the purchase. I would pay her $400/mth interest only for 6 months while I rehab the house. I really only need 4 months tops to fix and flip the property, but figured 6 months gives me a 2 month contingency. Once I sell the property then I would pay the seller the 30K balance I owe. 

I've done many flips over the years, but I usually pay cash, use private money, or buy subject to . This is my first owner financed deal so I'm not clear what contracts I need and what should be recorded locally. Please help, because the seller is waiting for me to draw up the contracts. Any help or sample contracts would be appreciated.

@John Clare   This is an easy one, use the same purchase contract you already use.  The only difference is that you articulate the deal inside that contract.  For example, where you show purchase price, add the text "Paid as $7,000 down and $400 per month for 6 months with the remainder due when property is sold" or however you accurately explain your agreement.  

Thanks @Josh Caldwell. I thought there was more to it. 

Originally posted by @John Clare :

As the subject suggests, I'd like to know what contracts are necessary for an owner financed fix/flip deal? Let me outline the situation.

I'm buying a fixer upper from a distressed seller in the state of North Carolina. She's agreed to sell me the property which she owns free and clear through owner financing. I plan to buy the property from her for 37K and put down 7K towards the purchase. I would pay her $400/mth interest only for 6 months while I rehab the house. I really only need 4 months tops to fix and flip the property, but figured 6 months gives me a 2 month contingency. Once I sell the property then I would pay the seller the 30K balance I owe. 

I've done many flips over the years, but I usually pay cash, use private money, or buy subject to . This is my first owner financed deal so I'm not clear what contracts I need and what should be recorded locally. Please help, because the seller is waiting for me to draw up the contracts. Any help or sample contracts would be appreciated.

Purchase agreement, deed, balloon note, deed of trust. Good luck.

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