Selling and Holding the paper. First go around.
I'm looking to sell some sfrs to the current residents that reside in them. I'm seeking to sell because I'm trying to reduce my number of long distance properties to relieve the strain of keeping them running.
At this point, I expect to and am willing to hold the paper.
I realize it would be great to get cashed out asap, but suspect I'll be holding the notes full term for a variety of reasons.
Prospect #1 - I can hold the paper for 13 years and they can own the house free and clear at that point for a minor increase in rent. It stands to be a real win-win.
Good income, some may not be documented.
My questions are:
How do I go about handling / operating an escrow account? Do I need to run it the same way chase or chittybank would run one, with full disclosures, etc? Could I legally do it some other way?
Will I need to provide a bunch of other lending disclosures, similar to the mountain of docs a person gets when they obtain financing or can I legally keep it simple?
Obviously, the shorter the term, the better. What other pitfalls do I need to pay close attention to?
What challenges (other than nonpayment) have you run into on these sorts of deals?
Thanks in advance BP nation!