All Forum Posts by: Art G.

I have worked on a lot of seller financing deals. The only thing they care about is how much money they are going to make.  So that is your angle.  I use a mortgage calculator from this website, I like it because it gives a visual break down of all the payments. Seller can see all the money and the structure, and thus not so abstract. 

I take the purchase price and add it to the total interest and tell them you will get $XXX from the sale.  That way it has a huge impact on them when they hear it.

They also want to hear of a downpayment so they know they get some money right now.  Plus I use this as leverage with the agent to let he/she know they are going to get their commission now.

Finally if they are still hesitant offer them a balloon payment option in 10 years. That way they make most of the interest and still get a big payoff.  This allows the buyer to build appreciation and equity to either refi or sell it.  I always word it as, "Seller may elect the balance to be paid off in 10 years, with one year notice provided to buyer."

This makes it an option, not mandatory.  Also it gives a time period for them to act to enforce the option.  If they do not give the one year notice then they did not elect the payout.

I think I gotta go with @Chad Nagel on this one. He lived there and sold there, and says its no good. That zebra aint gonna change its stripes. Chad was right, sell the property cheap, and use that cash to get into some better investments with more guaranteed returns.

The system took them down for some reason. But as it turns out based on @Russell Brazil advise about Maryland law on real estate, you don't want that one.  I would recommend you join a local REIC and talk with them about where to get forms. Or look up a local real estate attorney there and pay a fee to get hooked up with the kind of contracts you need. If your state is tough on it, then you do not want to try to save a couple hundred bucks when you could be risking 10's of thousands from lost profits.

@Aaron Fox My pleasure to help! I heard that too about long term holds. There are two forms of LLC, one is a partnership and one is something else lol... I know it was the second one that is better to long term hold in. The video I watched on it is found here, he is an attorney from Colorado. He is my mentors son, cool dude, done a ton of deals. 

@Rajeev Kotyan Good call on the annual contract and document review. I think that is a great idea!!

Check with your tax guy or local financial planner. Each state is going to treat you differently for taxes depending on your entity. I use the S-Corp in CA, for federal tax reasons it is better, I pay myself a reasonable salary (small) that covers FICO,SS and all the usual stuff, then pay myself bonuses which arent subject to FICO. CA treats LLC and S-Corp taxes the same.

@Russell Brazil WHAT!?!?! I thought CA had the most at 200k or something. Oh you mean like 1 in 100 people are attorneys... So you guys are first at 800/10k then NY at 90/10k? That is unreal... but I guess being DC you need that many to tie things up forever lol

@Russell Brazil good lookin out! Soooo glad I dont work there, sounds like a nightmare! 

Hmmmm... I am not 100% on what you are saying. Do you mean that you want to take a loan out against the vacant land to use to build the site? I dont think banks will go for that alone, but if you show them plans to build and what the value will be when done, then they might go for it.

You are better off looking for new construction loans, they are more used to this concept.

But most importantly, what kind of market is there to rent out this vacation home? Do a lot of people come to that lake? Is the land within a reasonable distance to amenities? What would be the rents from such a vacation home assuming there is demand for it?  Try calling local vacation rental brokers and seeing what their opinion is.

My first reaction is the same way I feel after thinking about it and writing the above, keep the land as collateral and use your cash and loan power to purchase income properties.

And try not to change jobs till you get the loan. They will not give it to you if you recently changed jobs.

Ok now that I know what you want... which is both lol, I did some research on google in Maryland and found a bunch... I hated them all. They were all 8 pages or more. That will scare your buyers away.  I found a website and the first contract for purchase agreement in the list of them in the top center was perfect. Super short and simple, covered all the important stuff... almost. When you download it, you will NEED TO ADD two more sections: "Buyer shall have the right to approve of an inspection of them home within a reasonable time" & "Seller shall furnish Buyer with marketable title to said property. Buyer shall have a reasonable time to review title, approve of title and or furnish any objections to title in writing to buyer."

You will also see on that list an option contract and an assignment contract.

You should also join a local real estate investors club and get advice from people in the business from them. This is not a game, lots of money can be lost and you need to do this right.  Get guidance from locals, they will be happy to help you.  Its a good idea to have them and or an attorney review the contracts as well.  Remember you have to keep them simple for the buyer because if they get confused or overwhelmed they will simply reject your offer.

Good luck