Updated over 6 years ago on . Most recent reply
Seller financing advice?
My son is looking at his first 3 unit, and since he is only 18 owner financing sounds like a great idea. It turns out, the owners are open to it. Any advice on forms, terms, do's dont's?
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Nothing wrong with owner financing :) You would just need to use a title company and make sure everything is properly recorded like a real mortgage so you have protection. Don't use a contract for deed as you have no legal protection..do the paperwork as a real mortgage like a bank.
Also if your son ever pays off the owner finance he should make sure that the seller releases the lien. I've used hard money lenders for short term lending and paid them all back properly. Then recently when I went to refinance I found that NONE of them ever released the liens!!!! This caused me issues & delays with the refinancing not to mention if I had just wanted to hold the properties without mortgages and the lender died I would have had major issues. So just make sure if your son ever repays them in full they release the lien on the property & it is properly recorded with the city. If he does use a bank to refinance out of the owner financing then the title company and bank will make sure all the liens are released properly. Just my advice and a lesson I learned about doing private loans.