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?
Investor · DFW, TX · Member since 2013 · 319 posts · 101 votes
11y
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.
Investor · DFW, TX · Member since 2013 · 319 posts · 101 votes
11y
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
Investor · DFW, TX · Member since 2013 · 319 posts · 101 votes
11y
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.
Investor · The Colony, TX · Member since 2014 · 192 posts · 66 votes
10y
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.
Investor · Sachse, TX · Member since 2015 · 223 posts · 66 votes
10y
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.