All Forum Posts by: Abigail Joanna

My lender is trying to get me to sign a 1-4 sales contract with things like a gift of equity from old owner, calling her the seller and me the buyer, but I am not the buyer. I've owned this home for six months. The only tie to the old owner is her holding the note for loan. She is not the seller.

1 Vote

Quote from @Ken M.:

Quote from @Abigail Joanna:

I don't know how to approach this. I'm sure she wants to pocket the difference between my down payment on the owner finance and the remaining loan amount.

Can someone help me understand what "ask your owner finance lender how much she wants to pocket at close" means?

Your comment: "ask your owner finance lender how much she wants to pocket at close"

It's a negotiation technique.

Owner financing can be set up multiple ways. You are asking the seller that's doing the owner financing; "how much they want in their pocket at closing". Say they have $200,000 in equity but they only need $50,000 and are willing or want to take payments on the rest called a "carry back". Then you have to decide on interest rate, term, balloon if any and so on for the remaining equity.
That is compared to the normal situation where the seller expects all of their equity at closing with no carry back.

Thank you very much! That makes the most sense

1 Vote

I don't know how to approach this. I'm sure she wants to pocket the difference between my down payment on the owner finance and the remaining loan amount.

Can someone help me understand what "ask your owner finance lender how much she wants to pocket at close" means?

0 Votes

Hello! Thoughts on getting a personal loan for a down payment for owner finance?

I have the cash for it but would rather keep the cash free and pay off the loans together; I can afford it

0 Votes

Austin, Texas

Quote from @Andrew Syrios:

Your money being secure wouldn't be the issue when obtaining owner financing. It would be convincing the seller (and lender) that their money will be secure. Best way to do this is by giving them a first position trust deed (or mortgage depending on the state) on the house and a note and maybe a personal guarantee.

Yes it would be the issue. If not done correctly a seller could take a deposit or earnest money and claim it was not given unless the contract or some safety net is in place, hence me asking for advice on what others are doing to keep their money secure.

0 Votes

Austin, Texas

Quote from @Chris Seveney:

Quote from @Abigail Joanna:

New to this. How do I obtain owner finance but make sure my money is secure during option period and that the agreement is legitimate?

Thank you in advance!

Seller financing does not have "an option period", you are referring to lease to own. True seller financing (not lease option or CFD) you are the owner of the property and the prior owner is the lender and you are the borrower.

The transaction should be done just as if you were getting a loan from bank of america - meaning you have a title company and escrow etc. handle the transaction, the only difference is the lender is the seller.

Option period of the sales contract, I'm not referring to lease to own.

1 Vote

Austin, Texas

New to this. How do I obtain owner finance but make sure my money is secure during option period and that the agreement is legitimate?

Thank you in advance!

2 Votes

Austin, Texas

Quote from @Nathan Gesner:

Quote from @Abigail Joanna:

Do the math. If it costs $100,000 to install an ADU and it rents for $1,000 a month, then it may be worth it. If it costs $150,000 and the ADU rents for $750, then it's probably not worth it.

Here's a guide on how to analyze a property. Do the math and see if an ADU is worth the cost and effort.

https://www.biggerpockets.com/blog/rental-property-cash-flow...

My adu would be about 15-25k to install. Rent would probably be a short term nightly basis.

0 Votes

Austin, Texas

Hey bigger pockets family, I'm facing a dilemma that consists of me choosing whether or not to buy a tiny home and put it on my current home's property, creating an ADU to rent out or to save that money that I would put into the tiny home and save for my next purchase. Thoughts?

0 Votes

Austin, Texas

All Forum Posts by: Abigail Joanna

Abigail Joanna has started 5 posts and replied 9 times.

Post: Is a 1-4 sales contract used in a refinance from owner finance to conventional?

Post: Lender for my owner finance refi asking how much seller wants to pocket

Post: Lender for my owner finance refi asking how much seller wants to pocket

Post: Using a personal loan for down payment to keep my cash reserves free?

Post: How to go about getting owner financing and keeping it secure?

Post: How to go about getting owner financing and keeping it secure?

Post: How to go about getting owner financing and keeping it secure?

Post: Buy tiny home to put on property or save for next property?

Post: Buy tiny home to put on property or save for next property?