Hello BP friends, I have a few questions.
I am selling an investment property out of state (Indiana) and offered the buyer seller financing. I offered 1.25 over prime (which is a total of 4.75%) over thirty years with 10 percent down. The buyer is paying full ask price and the property has been on market for 45 days.
I believe I need a real estate attorney in the state of the transaction to write up the contract, is this correct? Who will facilitate the logistics such as amortization schedule, fees, penalties, etc? Does this lye on the attorney, title company or myself? Any due diligence you suggest?
Any information in regard to seller financing would be great. Thank you for your help!!!
Tread carefully and be certain to use an attorney. Dod Frank act is what you need to be concerned with with making sure you meet all the requirements of not falling inside the Dod Frank act. I would think you as the seller set all the terms.
@Justin R. Why are you selling the property? Do you have any more properties? How was it managing the pro management company from CA. I am analyzing a lot of property in Indiana.
@Curtis Harvey I still have rentals in various places throughout the South, and Midwest, including Indiana. I've always utilized property management because I enjoy the idea of "passive" investing, although I use that term loosely. I run my numbers to include PM fees so it's not an issue.
I sold the property because it wasn't performing as a rental. It ended up being a decent situation because I sold the property and am carrying the loan. Due to this structure, I was able to ask a higher price than I feel I would have if it was a conventional buyer.
I hope I answered your questions.
@Justin R. Justin, I'm curious how the sale went. What were the final terms for the seller?
@Brynn McNicholas I listed the home just above market value. The buyer offered full asking price. The loan is a 30 year fixed, with an interest rate one point above prime (4.8) and ten percent down. After four years the rate bumps up one and a half points, with the intent the seller will refinance out of my loan.
This gave me the opportunity to sell my home at the higher end of comps, allowed a less qualified buyer to own their own home, and gave me a place to invest my money other than the measly .75 yield I would receive in my savings.
@Justin R. Thanks for the summary! Sounds like a win-win. I love when we can be solutions providers as real estate investors. Best of luck to you!
@Justin R. If you have any properties in the Evansville area you are thinking of doing the same with, I'd be interested in hearing more.
@Justin R. If you do not mind me asking, how much was the down payment. I am always interested in knowing how much the cost was to get into a property? Thanks in advance.
@Justin R. It is also a great way for new investors to get into the business.
15k down. House was already dialed in with medium quality rehab.
In my opinion, one of the best way for newer people to get into the business is finding deals. If you can find a great "deal" everything else will fall into place.
Researching and analyzing gives you education and experience within multiple facets, including assessment and analyzing, local markets, trending, etc.
If you find a great deal people will want to partner with you, offer you loans, or take the contract from you. Most importantly, this allows you to network and create new relationships.
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