Purchasing a home via Land Contract

[Patrick Blewett]

Hi All! I am arranging to buy a small space in Santa Fe New Mexico that is apart of a small complex. The unit I am looking to purchase is unwarranted, therefor the unit does not qualify for a conventional mortgage. I have looked into what they call a Portfolio loan which seemed very promising. It's a 5/1 arm, but the minimum to close with a Portfolio loan is 150K. The unit I am wanting to purchase is $160K, and after down payment I will be just under $130K to financed which falls short of the Portfolio loan requirements. Therefor, I am looking at other options. At the moment, seller is willing to arrange a Land Contract. I currently have a land contract with another property and it seems to work well. At the moment I do not know what the sellers balance is on the property, guessing around $80-100K. I have offered the seller 40K down, to mitigate some or any of her worries that we are not qualified buyers. What issues could I foresee happening in the future? What would a fair interest/payment arrangement be? Are there any other options beside a Land Contract? Thanks for your help and advice!

[David Torres]

@Patrick Blewett as @Marc C. alluded to, a very popular instrument in NM is a Real Estate Contract (REC), very similar to a land contract but with some caveats.  I have done several of these deals, let me know if you have any specific questions.  The biggest gotcha, is the fact that with a REC, there is no Judicial foreclosure and the lender can foreclose quickly if you miss your payment (I believe it is 30-45 days).  Lots of nuances, happy to answer any specific questions you might have.