Updated almost 7 years ago on . Most recent reply
Owner Financing Thoughts - Dallas, TX
Hello all,
I am a local investor and Realtor® in Dallas, with my first ever post! With any luck there are some local owner financing experts that don't mind giving me some pro tips.
I have a new property that I could flip profitably, but am thinking it is a great candidate for owner financing. I purchased for under $100k, and it would probably fetch $130k-$140k on MLS. Based on this, I am thinking asking $150k from someone who potentially wouldn't qualify otherwise isn't unfair.
The main topics I am hoping to learn more about are:
- Rate (to charge buyer) - I am thinking 10% is fair, but want to hear other opinions
- Legal (to protect myself) - I am not a lender and want to make sure I am within guidelines of not acting like a lender
- Financing and Arbitrage (to leverage) - What type of agreement can I use to take a loan out on this property, and still owner finance to the end buyer
- Terms and Reselling the Note (tax benefit and reinvestment) - Amortizing based on a 30 year note with a balloon payment at year 3-5 or so sounds ideal (based on my initial basic modeling), but not sure that would make sense to a buyer. Also am wondering if anyone has experience helping someone build credit in hopes to sell the note to another party. I know some private lenders that would likely speculate on this sort of deal, but wanted to hear other input.
Looking forward to learning and networking!
All the best,
David