Looking For Suggestions On How to Structure Owner Financed Purchase with Equity for Cash Flow

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Looking For Suggestions On How to Structure Owner Financed Purchase with Equity for Cash Flow

Ted Chan
Beaverton, OR · Member since 2013 · 19 posts · 1 vote

I'm interested in getting ideas/clarification for the best way to buy and hold properties with some equity, with motivated sellers. Some might be have lis pendens or notice of default.

The goal is to get a property under contract and keep the existing financing if possible, I don't want to come up with a big down payment and get financing, control it, and rent it out for cash flow.

I'd be putting money in to catch them up, and pay any fees.

From the research that I've done so far my options are:

  • purchasing subject to existing mortgage
  • wrap mortgage
  • land trust
  • trust deed (i'm not sure if this is different than a land trust)
  • lease option

Any suggestions or clarifications would be helpful along with Pros/Cons of each method.

Thanks for your input ahead of time.

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  • Curt Smith
    Rental Property Investor · Clarkston, GA · Member since 2012 · 2k+ posts · 1k+ votes
    12y

    Hi Ted, A lot of thoughts come to mind from your post but how to trim it down to just a small amount of typing. :) Your list reminds me of guru talks from 2011 and earlier when the market was a buyers market. Jan 2014 most areas are strongly a sellers market. It's much harder today to sell a seller on a subject 2! There's too much positive news, positive mindedness in the seller to settle for just signing the deed over (any more).

    The key question for all investors and this should be done about every 3 months: what is working right now and going forward? I don't have a strong sense but I have heard that yellow letters to NOD/late payers stopped getting good response rates. So the sub2 and catchup arears strategy works but there's fewer owners in tough binds to make the yellow letter campaign cost ($.50/postcard) worth it. You need to mail 1000's every 3 weeks to the same list 5 times.

    @Brian Gibbons

    @Brian Gibbons

    Good luck. This is just 1 cent of a hundred dollar program for you. :)

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  • Brian Gibbons
    Investor · Sherman Oaks, CA · Member since 2008 · 6k+ posts · 3k+ votes
    12y

    Thanks @Curt Smith

    Hi @Ted Chan

    I'd conserve cash and look to buy with as little cash as possible on sub2.

    Here is a primer on Sub2 http://www.biggerpockets.com/blogs/3/blog_posts/32276-sub2-training---01---introduction

    Making up back payments and learning rights of redemption in Oregon is not easy. Foreclosure rescue issues from the Attorney General's Office need to be observed , you need to be careful of Pre Foreclosures.

    Find the best school districts, buy sub2 and rent out or sell on lease option.

    Learn Dodd Frank issues on Owner Occupant Seller Financing.

    Call me or email me for conversation about what you are doing.

    Best Wishes,

    Brian

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