How many subject-to financing deals can I lawfully make?

10 Replies

Is there a limit to the amount of multi-families I can acquire through subject-to/seller financing? Is there a law stating that I have to wait so-and-so amount of time between each acquisition?

Hi Jordan,

You can check the specific laws in Florida, but I've never heard of a limit.  Seller financing now has some strict rules because of Dodd-Frank on the seller's side, but not on the purchase side.  

Subject to's are more of a matter of who's paying the mortgage, so again, I've never heard of a limit.

Anyway, best to check with an attorney in FL.  If you don't have one, you may be able to find one of those pay services online that lets you submit your question to a licensed attorney in FL and they answer it for you.  That constitutes real legal advice.  Unlike what I'm giving you, which is just my opinion on what I've heard.  

Allen

Allen Maris, Real Estate Agent in CA (#01918765)

Seller financing MFs to a buyer for a business purpose does not fall under Dodd Frank or the new CFPB regs.

I'll go out on a limb and say there's no limit to the number seller financing loans you can obtain for a business purpose in any state or federal regs. 

From what I have read about the Dodd Frank, it is for seller financing a buyer that lives in the property. OO oe Owner Occupant.

So if you are ACQUIRING on seller financing, then renting it out, not living in it, it is infinite. 

Seller financing does not go on the credit report as does FHA or Conventional financing, and if you use land trusts for privacy reasons, an asset search can be difficult in case you get sued.

@Jordan Redar  

Kristine Marie Poe 

Originally posted by @Brian Gibbons:

From what I have read about the Dodd Frank, it is for seller financing a buyer that lives in the property. OO oe Owner Occupant.

So if you are ACQUIRING on seller financing, then renting it out, not living in it, it is infinite. 

Seller financing does not go on the credit report as does FHA or Conventional financing, and if you use land trusts for privacy reasons, an asset search can be difficult in case you get sued.

@Jordan Redar  

@K. Marie Poe 

I'm also assuming by "multi-family" the OP means more than 4 units.  Putting buying for a business purpose aside, lending on more than 4 units is not governed by Dodd Frank.

@Brian Gibbons  That's great! Thanks for the summary.

Kristine Marie Poe I was considering MF as 2-4 units.

Originally posted by @Jordan Redar:

@Brian Gibbons  That's great! Thanks for the summary.

@K. Marie Poe I was considering MF as 2-4 units.

There's been some recent discussions here about how multi-family means different things.  With the MF investors saying that it means more than 4. Makes sense since 1-4 units have different lending products available to them, including owner occupied loans. 

1-4 residential unit properties fall under RESPA and Dodd Frank.  But again, if you are buying for a business purpose and seeking seller financing for a business purpose, with no intent to live in the property, Dodd Frank does not apply to those loans.

Just one layperson's opinion.  Not legal advice.  Of course.  

Dodd Frank is only if you are financing the buyer that lives in it; if you as an investor are negotiating with an investor (sub2, land contract, seller carry, etc), and you are not living in it, Dodd Frank doesn't apply (investor to investor). It would be prudent to state that you will not be living in it to protect the seller.

@Jordan Redar  

  no limit to how many you can buy,, however each state interprets the dodd frank in their own unique style.. and its the sellers responsibility to adhere to it not the buyer.

1 to 4 units under federal law is relegated to the dodd frank.. under many state laws if they are non owner occ  then they are exempt.. some states they are not and when seller financing them you must have an LO put the paper work together for the seller. ON sub too I think your good either way.  5 units or more is exempt nation wide and state wide.

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