All Forum Posts by: Laurent Feral

Hi Steve   .  No , you forget two  things :

a) The owner finance buyer will also put a deposit up front , in order to buy the house with O/F. It should be at least 15% of selling price ($31,500), possibly 20%. This deposit serves as a protection for me as if the buyer defaults at some stage, he looses that initial deposit and I foreclose on the house . And do it again.

b) i  get an interest spread, i.e. I borrow at maybe 5%/6% and i will lend to the buyer at 9% approx.   This until the buyer can refinance himself  (typically 3 to 7 years) and prepays the note . 

Wrap around note . Lease + option to buy is legally difficult in TX, as they changed the law in 2005 . (or maybe even impossible, not sure ). The house will stay in the LLC, and i want the loan to be taken by the LLC , so not to risk my credit score. Probably this will justify a higher interest rate.

Hi every body, and thanks to you all for taking the time to read my question and to answer it so precisely .  I like the idea of speaking to the commercial lending side of the bank ,and to local banks who do not repackage and resell the loan to Fannie  or Wall St. 

Thanks to @ Emily Cortright , as you are also in Fort Worth, TX, the local experience is valuable. I am not too afraid of the due on sale clause, as you should keep the lender happy by paying every month.   
I have found a possible local solution,  but rates seems quite high (6.9 to 7.5 %) for 30 years.    (Greg Downey you are right).

Will dig into these suggestions.  

Because in our market I expect to sell it for a higher price with O/F than without. My local investors say a typical 5 to 7 % bump from normal retail price, for pre approved buyers. This is logical, you tap a larger pool of buyers

Hi y'all!

I have a roadblock with refinancing .

I want to sell a Fix & Flip house with owner finance, in Dallas Fort Worth , TX. 

The house is in my LLC, and currently being rehabbed. Funding for the rehab comes 70 % from a hard money loan (at 12% interest rate) and 30% from my own equity.

To be able to sell the house with Owner finance, I need to refinance the hard money loan (6 months maximum) with a long term mortgage, at a decent  rate.

All mortgage lenders that I talk to will lend only to a person, not to a LLC. And with various refinancing ratios, ( max of 75% of Appraised value, minimum holding of 6 months prior to refinancing , etc..) Which means that I have to buy the house from the LLC, get a mortgage and then resell the house with Owner Finance. Which is expensive (transaction costs) , tax inefficient and does not change the collateral, (still the house).

How can this be done ? any idea?

Thanks