Owner financing a portfolio

3 Replies

I am a newbie and stumbled my way into a good deal but it is a little over my head. I am in negotiations right now to purchase 5-7 properties on terms. My question is how do I structure this. Defer closing til the end of the note? Get my name on the deeds and put him as lien holder?  Would that violate the more than 3 owner financing rule without a mortgage lenders license even though it is only one note? I need some help. Just to clarify when I say newbie I mean I just finished rich dad poor dad and started learning about real estate a few weeks ago. I am as green as could be. I took action..now what?

If you are buying the properties as portfolio and you do it as a blanket mortgage since it’s only one note I don’t think it would violate the law since you would be under three for the year

5-7 SFRs? It sounds like you need to call @Jay Hinrichs . Are you purchasing as an LLC? If so that wouldn't fall under Dodd-Frank, but definitely make sure you know what you're doing...5-7 properties after a few weeks of real estate education is quite a bit. How do you know it's a good deal?

@Matt Thompson   Absolutely get a real estate attorney that knows this stuff, it's not DIY.  I've done a number of owner finance deals as a buyer, and an attorney is not terribly expensive, typically about $1k per property including the note and title search.  You should also get everything appraised so you're not overpaying.

Most sellers in my opinion don't hold the note longer than 5-7 years and then there will be a balloon, so you'll have to be ready to refinance if you're planning on holding them.

Yes, you would take ownership of the property and place the seller as a lienholder. That way you actually own the property and can take full advantage of the tax benefits.

- Tom