I have a property that I NEED TO SELLER FINANCE. I don't want to be the landlord due to the age of the property and potential city landlord requirements. The home is not in bad condition it's just that it's 100 yrs old and I refuse to deal with the city as a landlord...(Just had to do 10k in Daytona Beach on a rental NEVER AGAIN) ...Having dealt with this and the nightmare I need to seller finance the home vs renting it.
That said, I ran ads and talked to 40 people, I picked the one that hands down had the best ability to pay the monthly payment. The potential new buyer owns a tattoo parlor and makes about $100,000 a year. ( I reviewed all of his payment receipts) The issue is it's all cash and it's not in a bank to prove he has the money. I get it that he's not playing by the rules but he has NO DEBT, owns his own business and makes good money, so how do I qualify him as NON-QMbuyer. (No taxes were filed)
I not looking for "You can't do this". I'm looking for "How do I do this", this potential buyer is the best applicant and should be able to find a compliant way to get him Dodd-Frank compliant.
So what options do we have to "Prove ability to Repay"
Thanks in advance for the replies.
I’m looking forward to hearing the input on this! Best of luck!
Me too...I think I have a solution...wanting to see if there any other input before I run my idea past my attorney.
Sorry to answer your question with a question, but I’m quite curious. Do you not qualify for one of the seller finance exceptions? Or, what is disqualifying you may I ask? Does being a lender yourself cause a difficulty? Or, am I not understanding the allowed exceptions under Dodd-Frank? Thanks
@David M. . Hi David. The borrower has a cash business, not taxes filed for the last year, 550 credit score. All of which sounds horrible and not allowing me to get a MLO to pre-approve him. I don't do traditional lending...I guess I'm not sure of the Dodd-Frank exemptions you are referring to.
When you dig into the applicant's story it makes a lot of sense to me.
-Cash business, he and his girlfriend are Hispanic...they have NO debt and make good money. (Any applicant that has NO DEBT, owns a business and has cash, in my opinion, is a much better applicant than someone that has a W2 Job, debt and a high credit score...it's backward...when they lose the job they default on the debt and the score drops like a rock...not this applicant...he loses a client he get a new one.)
-No taxes - makes sense if you run a cash business ( Did not say I agree...I file and pay my taxes each year) but I understand what's going on.
550 Score - Applicant has the same name as his dad...the Hispanic is very big on family values which I like a lot, they take care of their own. His dad used his credit then passed away, he needs to fix this but it was not his debt perse. Also, he has some small medical bills which are understandable. All of which can be fixed over 6-12 months.
I'd love to hear about the exemptions you are referring to with Dodd-Frank.
I'm not a professional in lending.... Just Google seller financing Dodd Frank. Tons of references come up. other than you are a professional lender, Dodd Frank seems to exempt owners who do a seller finance here and there...