Owner financing and the boarding house
I am a new member this week and I have a 2 part question . I bought my first rental using owner financing I am looking for other property's using owner financing as well as working with a bank Interesting subjects have come up ..One bank said they could give me a loan for single family home that I am going to rent to college students they are going to give me a conventional loan with 20 down and qualify me using the potential rents that a am going to receive another bank told me they could not because they could not give a mortgage were there are more than 3 people renting they call this a boarding house and said it is against the law to rent out to more than 3 college student at a time without getting approval from the town . I know this goes on all the time could this be a potential problem . also the person that gave me the owner financing Has another property using owner financing I have sighed a agreement that if I do not Make my payments he can go down to the court house and take back the house which I believe is fair In that I only put 10 % down. I believe this is called a land contract he wants to do this again .I want to ask for no money down and pay the 10% down in monthly payments for a year or so . But I would need to rent out to 5 more college students to make this happen I am waiting on my attorney for for his answer I have talked to a person who is active in Springfield ma. were I am buying and said the police have more problems to worry about than counting how many people are in these houses and not worry Is there a flaw in my business model or Am I over thinking this. love your in put Thank you