Help Me Connect the Puzzle Pieces on Owner Financing

Help Me Connect the Puzzle Pieces on Owner Financing

Southern US · Member since 2013 · 2 posts · 0 votes

I'm a NEWBIE at Real Estate and act kind of like a bird dog. Recently I've run across a few people that want to purchase a home, but are mortgage unfinanceable today, due to credit, residency status, etc. They probably wont be ready to qualify for a mortgage on their own for a couple of years, yet housing prices/taxes keep going up. I sense an opportunity, but am not sure how to connect these puzzle pieces: 1.) potential borrowers have 20-25% down payment  2.) I want to some type of compensation to facilitate this deal  3.) I am debt free 4.) I have a 785 FICO 5.) I have about $125K cash to use. 6.) I don't think i want to hold property for more than 2-3 years--mainly just want to get in, then get out. 

I thought that maybe i should purchase the home as an investment property, lease it back to them for two years and then sell it to them once they are financeable on their own, but am not sure how i would incorporate their down payment into the transaction. Is this the best approach? What other mutually beneficial approach would you recommend to facilitate this type of transaction? I imagine i'll need Hard Money? What type of compensation seems fair to facilitate such a deal, knowing that purchasers are getting to move into a home and stop paying rent two years ahead of when they would be ready to purchase on their own. I would love to put together a lather-rinse-repeat plan, where i can repeat this over and over with new buyers. 

Signed, Newbie

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  • Specialist · Delran, NJ · Member since 2016 · 2k+ posts · 951 votes
    6y

    Interesting idea...you'll want to make sure that you are clear with your lender because many have provision against sub-leasing in the paperwork

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