I have a person in my home in College Station Texas that has been renting for 2 yrs, at 2500$ a month and is always on time. He now wants to purchase the home, but does not want to get traditional financing, since he just put a lot of money into his business. Here is the plan he has proposed since I am not too knowledgeable in real estate investing or financing.
Sell price $500,000, 2,860$ a month payment @ 30 yr amortization, 70,000$ given up front, Balloon in 5 yrs @ 404,000$; < I think. he will pay taxes and insurance.
I have a 1st and 2nd on the home now. I am not sure if I have to pay off the 2nd first or wrap it all into one. I am aware there is no longer a balloon, so how is this written up?
Looking for a lawyer that is knowledgeable or that will touch a wrap is coming to be a little difficult . If someone has a great lawyer in Houston are to use that would be greatly appreciated, if their name can be given.
When does the real estate agent get paid?
Since the buyer is aware of the Due on Sale Clause; what happens if the bank decides to call it due 1. I foreclose on the buyer with a Due on Sale written in my Wrap, 2. He pays out right for the home 3. Does he lose his 70,000$ if he cannot buy the home? etc...
Should I use a Title Company, if one is available? I also see loan servicing companies online but that seems to be the extent of it, how does someone go about finding a reputable one or should they be used in my situation.
Thanks to everyone in advance for your help!!!
Find a licensed Mortgage Loan Officer and/or a good attorney to write this up for you.
Your numbers are off: $430,000 at 6%, 30 years is $ 2,578.05/mo with a balance at 5 years of $400,133.73.
And you may can be foreclosed on for a due on sale violation, but you couldn't foreclose him for a due on sale violation, because he didn't sell it after he bought it from you. You may could have a provision that allows you to call the loan due immediately if you get foreclosed due to a due on sale, but that may violate some regulations and be unenforceable.
By the way, what agent?
See David Willis JD and LLM
That LLM is priceless.
@Wayne Brooks Thank you for the info, it does look like I have left out a detail or two. The interest rate will be 7%. Pam Johnson is my agent.
@Brian Gibbons I read through the Lone Star website extensively prior to posting and he does have a lot of valuable information on the site. However, I looked at reviews on him as a lawyer and not too many people were speaking highly of his work ethic, so that is why I have not contacted him.
Have you had any dealings with the law firm and what was your outcome?
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