RMLO San Antonio? Owner finance terms?

Question

Looking for a RMLO in San Antonio to set up owner financing loan, can anyone reco one?

Also, if someone can provide input on going owner finance terms that  would be great. I initially offered 10% down and 10% interest. Someone countered with 10% down and 8% interest. Wondering what the market around SA is going for owner financing.

Boyd McClean · Answer

These are all good suggestions. Depending on your needs you could split the loan into 2 notes. Example $70K loan divide into 1st @ $35k and second @ $35K. After a little seasoning sell the 1st at par and hold the 2nd in an IRA or for future use as collateral for a private loan. It is best to have an MLO do the loan as it adds credibility when selling note and asking par.

If you are going to sell the 1st half look for someone with an IRA. There are many ways of doing that. I will tell you this as of April 2018 there were 385 real estate deals run through Quest IRA in Texas. All of this is public information.

Another alternative create the note and then hypothecate  https://www.investopedia.com/terms/h/hypothecation.asp.

Have a plan A & B depending on your needs and exit strategy.

Rick Pozos · Answer

If you are selling to a person who will not live in the property, they are legal. If you are selling to a llc or business entity, they are legal. If you are selling a commercial property, they are legal. There are many ways that balloons are legal. The only way that they are NOT legal is if the entity making a loan to an owner occupant is in the business of making loans on a regular basis. AND if you only make 1 loan per year it is legal even if the owner is the occupant of the house.

I dont do this regularly so it is not my business. If you want to start a business doing owner financing, you need an rmlo. If you plan to do more than 3 per year, you need an rmlo.

Waylon McCulloch · Answer

The notes I've done so far have been above 10% interest (10.1, 10.3, just above 10), but I would rather give a little room on the down then change interest... just my preference.  My goal is to have 30 year notes paying me for cash flow, and I don't have balloons.  Rick Pozos is right though, if you have someone negotiating the interest be sure to negotiate something else that benefits you to give it up.

RMLO I used Texas Mortgage Capitol on one of them, they were professional and I have nothing bad to say about them.

Rick Pozos · Answer

I have done anywhere from 6% to 9.9% depending on the credit worthiness of the borrowers. If you plan to do 1 owner finance this year, you dont need an RMLO. If you think you may do more, get an rmlo to help. If you are not very savvy about owner finance and are not up on the Dodd Frank stuff, get an rmlo.

When someone counters my interest rate, I ask why should I? If they have a decent credit score, sure. If they are going to put more down, sure. If they say they are going to pay off the house in 5 or 10 years with a balloon, sure. They have to have a reason WHY I should lower the interest rate.

Waylon McCulloch · Answer

@Jaime Garza I haven't been doing balloons so far, once I sell the house owner finance I'm looking for 30 years of payments and cash flow.

@Rick Pozos  I'm gonna find you at the next AlamoREIA meeting, buying notes is something I'm interested in for the future, and would love to hear your experience and thoughts about them.

Rick Pozos · Answer

I have done 5 year balloons and I have done 20 year and 25 year loans. It has depended on my financial situation. When things were a little shaky in 2010 to 2014 we did a couple of 5 year balloons. Nowadays, if we can have a property paid for and finance it for someone, it is our retirement money and we would like it to pay us for the next 25 years. I am almost 50 so the newer ones should take us towards the sunset of our lives.

We have also bought a few non performing loans at a big discount with extra money from flipping. We got the notes performing and have that as a base for retirement or FIRE along with some rental properties.

And yes, call me when you are in town. Always love to chat about real estate.

Jaime Garza · Answer

@Rick Pozos, @Waylon McCulloch thanks for the information very helpful. Are either of you doing 5 year balloon payments?

On a side not I live NTX but still attend drill in Sa, if you either ever want to meet up an chat REI would love to connect with you all over lunch.

Best,

Jaime

RMLO San Antonio? Owner finance terms?

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