Skip to content
Creative Real Estate Financing

User Stats

20
Posts
8
Votes
Edward Shin
  • Real Estate Investor
  • Los Angeles
8
Votes |
20
Posts

INSTALLMENT LAND CONTRACTS: what's the good, the bad, and the ugly?

Edward Shin
  • Real Estate Investor
  • Los Angeles
Posted Apr 28 2015, 23:53

I've recently been introduced to the strategy of selling property using an installment land contract. It's appealing for a number of reasons: the buyer gets equitable interest in a property, takes care of all repairs, taxes and insurance, and ultimately, gets legal title to a property. The seller (me) gets top dollar for a sale, and monthly payments over the term of the contract (roughly 20 years) -- assuming the buyer is properly vetted and pays in a timely fashion. If a buyer does default, PA ( where our property is ) has favorable laws and clear procedures to handle that type of default situation ( not so in all states ) so i can rinse and repeat with little down time.

Before I pull the trigger, I thought I would ask the BP Nation to share any advice, anecdotes, or information about their experiences, caveats, and takeaways surrounding installment land contracts. It's hard to discuss this strategy objectively with the person who introduced us to the concept because all he sees is potential and upside (perhaps rightfully, but i need other perspectives). While I'm aware of some of the pitfalls and potential downside (especially with complex regulations and compliance issues), I'd really appreciate any and all opinions and facts that discuss installment contracts as good, bad, ugly (and other) so that I can view and assess this strategy from a diversity of viewpoints and experiences.

Any thoughts, BP Nation?

Loading replies...