"Owner Financing & Regulation"

[Mitch Stephen]

It seems the longer we live the more regulation we see. It's true in everything and real estate is no exception; Dodd-Frank, S.A.F.E. Act, Finance Reform Act, Your State's Property Code, Truth In Lending, R.E.S.P.A., etc.

It's starting to shape up like this; If you're afraid of conforming to some regulation, then stop thinking about being an entrepreneur and consider staying with a job. The owner's will be saddled with the compliance issues.

Want to start a hot-dog stand or a food truck business; regulated.

How about a nice little restaurant? Regulated.

Open up an insurance agency? Holy cow! Regulated!

Say you want to open a little Remodeling & Construction company? You bet it's regulated! licenses, permits, OSHA.

Thinking about becoming a Real Estate Broker, or an Agent? You can bet you'll be taking courses, taking exams, and answering to a board. You'll even have to buy E&O Insurance because there are so many rules your bound to get sued!

Opening a bank? Banks are so regulated it's a wonder they can even survive. In fact, the wealthiest people I know say there is a movement to consolidate the 2,000+ banks down to 5 or 6 Banks...and the over regulation is part of that movement.

Day care business; regulated

Home health care; regulated

Catering; regulated

Open a bar; regulated

Internet sales; regulated

It's hard to think of any business that's not regulated these days.

So when it comes to "Owner Financing"and regulation, it's just another day of the week. Build your team of advisers. Consult with your experts regularly, and conform. The bad news is; It takes effort, time, and money to be compliant. The good news is; The regulation keeps a lot of your competition afraid and standing on the sidelines.

I use Grant Kemp and Tony Palumbo as my Residential Loan Originators (RMLO). It's their job to keep me compliant with all the regulations within my realm.

I have a CPA that owns more houses than I do (if you can believe that) and who is a hard loan money lender himself as well.

I have several different types of attorneys;

one who specializes in eviction and foreclosures.

another real estate attorney that specializes in contractual law. This is the attorney I use to decide exactly what paperwork I'm going to use to consummate different transaction; traditional sales, owner finance sale, flips, leases, lease w/Option, etc.

If I decide to take a property "Subject To" there is one and only one attorney I'll use for that. He's expensive but he's right on top of it! It's part of his core business, and he's a pro! I'm guessing the paperwork is at least 100 pages thick. I only do sub-tos if there's enough margin to cover this attorney. Scott Horne is an attorney who has done hundred's upon thousands of real estate deals; owner financing, hard money lender, title company owner. These are the kinds of pros we need in this business.

The point is, there are rules and regs to everything in life where major money is involved. Build your team. Seek council from the best. Comply, and get on with it.

--Mitch--