Real Estate Investor · Desoto, TX · Member since 2013 · 560 posts · 528 votes
Anyone in the DFW area buying houses regularly via a wrap around mortgage? I am looking at a potential opportunity (off market response to letter) where the seller would consider financing with his note in place for a 7 month period (seller out of state and wants to be done). I would like to tie up the property before someone else then conduct further due diligence. Based on initial assessment and discussion with seller, I am looking at this as a potential flip (again, need to gather more info). I have not purchased a property in this manner before.
For you Realtors, would the TREC 1 - 4 and Seller Financing Addendum be sufficient to tie up the property in the interim?
BTW I think that's a great strategy for flippers assuming it works - instead of paying for hard money, negotiate with the seller to take over their existing financing for the 6 months it takes to finish the project, then pay it off on the resale or refi.
Is the existing mortgage assumable? I would talk to an attorney or a title company for the most up to date rules, this is not something that you want to DIY based on Internet advice.
FWIW though, I think there's either a checkbox on the standard TREC1-4 contract, or a specific TREC addendum for this
@Grant Kemp is a very knowledgeable local investor for creative financing transactions
BTW I think that's a great strategy for flippers assuming it works - instead of paying for hard money, negotiate with the seller to take over their existing financing for the 6 months it takes to finish the project, then pay it off on the resale or refi.
The loan is not assumable. I was looking for the sample to familiarize myself with the terms and to better understand the transaction type. I would definitely use professionals to complete this type of transaction. Right now I am simply trying to tie up the property. I might be able to tie it up with the TREC forms and give myself outs to restructure. I want the seller committed so I work the due diligence.
I second lonestarlandlaw.com. I've used him for a few things. He's very knowledgeable, and wrote the book on Texas Real Estate Law for laypeople... Literally, it's on Amazon.
Why not treat this the same as the wholesaling. Tie up the property with a good contract and sell your contract to another flipper. I did a rehab in August this way. PM me if I can help you more. Also, I know a good attorney that is familiar with owner finance and wrap mortgages.