Scottsdale, AZ · Member since 2015 · 4 posts · 0 votes
Hi.
I first got into real estate by being sold a blue ribbon deal on a Go-Zone property in Alabama in 2008. It's been a solid money loser ever since and I wish I had BP back then. I took a business trip to Phoenix in 2009 and was shocked to see how each real estate was. I started buying and my partner and I set the goal to get 20 rental properties. We completed this goal in 2012.
I also did some flipping and made some extra money on that. I also used my ROTH IRA to purchase some real estate in South Euclid Ohio.
I am currently looking to sell off a good portion of my SFR rental portfolio via lease options and keep doing flips until I find the next big deal.
Have you considered selling your rentals with owner financing instead of doing the lease option? You continue to get a monthly check but get give up the taxes, insurance, and maintenance.
Feel free to PM me if I can answer any questions regarding owner financing.
I have considered doing the owner financing option before. I have five issues with owner financing but first a little background. My portfolio is centered around 51st and Baseline in South Phoenix. I would love to due owner financing if I could get around a few of these issues.
Issue 1) It is extremely rare to find an interested buyer that has more than a first months rent, security deposit and $500-$1000 of a lease purchase option. With all the low money down mortgage programs, it seems that any buyer with more than $4K would rather try to purchase with a cheap traditional mortgage.
Issue 2) I have not found that buyers are interested at the 10-12% interest rate I would want to get.
Issue 3) If I finance a property with only $3K down and the owner stops paying, I have to pay for the foreclosure and repairs. I would want at least $10K down (see issue 1).
Issue 4) Taxes on owner financing are at ordinary income rates
Issue 5) I feel I can due much better than 12% return with my money available
If you have ideas on how to establish owner financing I would love to talk to you.
I am looking to sell my portfolio of rentals at full retail. As a new investor you should be looking to purchase at a discount (especially if you can purchase cash and use credit to refinance).
I had considered putting a package of between 5-10 homes for sale all 100% leased with paying tenants. However, at the current price to rent ratios, I don't consider this portion of Phoenix to be appropriate for buy and hold investors. For example, 1 SFR 1360 sqft rents for $905/month and would sell retail at $130K & 1 SFR 2050 sqft rents for $1085 and would sell retail at $155K. I am not purchasing at these prices for buy and hold rentals.
I think selling on terms with ample down, whether it be lease purchase, lease w option, wrap - note, if free and clear instalment sale, there are all good ideas.
Have a RMLO look over the deal.
See www.SellerFinanceConsultants.com for the RMLO in AZ