Greensboro, NC · Member since 2015 · 129 posts · 30 votes
Hello everyone. I'm brand new to biggerpockets and I am still familiarizing myself with the site. I am in the Orlando, FL area and looking to utilize seller financing to acquire my first duplex. Any advice is welcomed.
Sure @Troy H. Land Contracts or contracts for deed do not place the property in your name until they fully paid off. They are a good deal for the seller only. You could be into it 10 years when the owner gets sued for a car accident their son was involved in. A lien will attach to 'your' property because of the legal owner's financial woes. You have all the costs of ownership, but no benefits. May as well just have an option to buy it.
Structure it as a note and deed of trust / mortgage or Real Estate Contract. Ownership rights from day one.
Build rapport with the seller before asking them to carry for you. Be prepared to put down 10%+ at higher than market rates. Never do a land contract. Good luck!
Hey Troy I am with an investor friendly title company here in Orlando and close on seller financing deals all the time. If you ever need help or have any questions please feel free to call or email me anytime. I love building relationships and would love to be apart of your team.
Build rapport with the seller before asking them to carry for you. Be prepared to put down 10%+ at higher than market rates. Never do a land contract. Good luck!
Thanks for the tip Steve. Can you tell me a little more about why land contracts are a bad idea?
Hey Troy I am with an investor friendly title company here in Orlando and close on seller financing deals all the time. If you ever need help or have any questions please feel free to call or email me anytime. I love building relationships and would love to be apart of your team.
Thanks,
Ryan thanks. I am looking to build a team of like-minded individuals. I am glad you responded because I did have a question about protecting myself from an owner who would take my payments, but not actually apply the funds to the exiting mortgage.
Am I only truly protected if the property is free and clear? That way the title is held along with my earnest money? Please correct me if I am wrong. Thanks again.
Sure @Troy H. Land Contracts or contracts for deed do not place the property in your name until they fully paid off. They are a good deal for the seller only. You could be into it 10 years when the owner gets sued for a car accident their son was involved in. A lien will attach to 'your' property because of the legal owner's financial woes. You have all the costs of ownership, but no benefits. May as well just have an option to buy it.
Structure it as a note and deed of trust / mortgage or Real Estate Contract. Ownership rights from day one.
Depends on what you are trying to do. If you are doing owner financing i assume you the seller would be selling you the property but holding a mortgage as well. In those cases we would clear title by requesting a payoff of the existing mortgage and paying that off so title is clear. Then there will be a new mortgage recorded with you as borrower and the seller as the lender. Or are you assuming the existing mortgage? In most cases I have seen most investors having the seller add them as an authorized person on the loan so that they can make payments directly. There are many ways to do it so you would have to speak with another investors that has done it before to get tips. From a title side of things we would close and insure the property as normal with an exception to that existing mortgage. I hope that explains what you are asking. If not maybe a phone call maybe better. If so give me a call or shoot me an email.
Sure @Troy H. Land Contracts or contracts for deed do not place the property in your name until they fully paid off. They are a good deal for the seller only. You could be into it 10 years when the owner gets sued for a car accident their son was involved in. A lien will attach to 'your' property because of the legal owner's financial woes. You have all the costs of ownership, but no benefits. May as well just have an option to buy it.
Structure it as a note and deed of trust / mortgage or Real Estate Contract. Ownership rights from day one.
Sure @Troy H. Land Contracts or contracts for deed do not place the property in your name until they fully paid off. They are a good deal for the seller only. You could be into it 10 years when the owner gets sued for a car accident their son was involved in. A lien will attach to 'your' property because of the legal owner's financial woes. You have all the costs of ownership, but no benefits. May as well just have an option to buy it.
Structure it as a note and deed of trust / mortgage or Real Estate Contract. Ownership rights from day one.
Thanks for the compliments @Brian Gibbonsand @Troy H.. Will take into consideration if I feel moved to go back to work again.
Other points of view will come out, I'm sure. Lots of Land Contract folks in the midwest, and maybe all over the place. I just feel sorry for the 'buyers' left holding the bag because they didn't do property title searches in the beginning and didn't realize in the end they didn't own anything after all. Cheers!
Steve for sure land contracts might be a problem as far as getting equitable but if you want to be a homeowner fast and you need time I think the land contract in some states is a great tool.
As long as you can make the payments religiously.
And record the land contract against the title
And use a loan servicing company like note collection.com
And use a property trust in case the seller gets sued
And get the sale and purchase agreement done at the same time and open up an escrow which starts the chain of events as far as intention to sell
If you're buying land contract you may want to find a mortgage company that will look at the land contract after 12 months as a refinance instead of a new origination
I have to investigate Washington state but I think buying on land contract and selling on lease to own might be a great strategy for many people
@Brian Gibbons Wow- there is a lot to do to protect yourself as a buyer of a land contract. If everybody did that, they'd be so much better off! Gotta help you get the word out.
Here in WA, we use what's called a Real Estate Contract. Generic name, I know. It's essentially a contract for deed, yet puts the real estate in the buyer's name right off. A Warranty Fulfillment Deed is executed at the purchase, held and given at time of payoff, as full conveyance/satisfaction. It offers more power of reclaim rights to the seller in case of default. A contract forfeiture happens vs a full foreclosure necessary with a note and deed of trust. Buy with a Note and Deed of Trust, sell on a Real Estate Contract.