All Forum Posts by: Brian Gibbons

I think having a REI company and having a licenced agent as a member of that company is a good. thing.

When I am not licensed I can talk to "an active listing" and not have a conflict.  

Selling on terms (from the home seller's perspective) and having a "plan b" in case the house does not sell with a traditional listing is a good thing.

Also, going after an expired listing, with the home seller frustrated with agents and saying "the seller can avoid the sales commission by selling to me on terms (lease option, wrap, etc)" is another good thing.

Having a license on the rental or sales side I believe helps.

And in some states, if you do lease option flips, it pays to have a licensed broker, not sales agent, as part of your llc (pay like a flat fee to look over the deal).

Best wishes to you,

Brian

Originally posted by @Brock W.:

@Alfonso Inclan

I read up on lease options and rent-to-own contracts. Interesting stuff. Unfortunately, the terms of my mortgage prohibit them. The lender considers it a transfer of the property.

So I'm back to selling the place outright. But I have several months to decide.

Thanks for the input.

Brock

@Brock 

Consider a lease and a ROFR, right of first refusal , read up by searching ROFR on BP

Sub2 and realtors are oppositional.

Buying sub2 and a note is a good strategy if done properly.

@Simon Campbell do you mean to ref me or @Bryan L. 

don't do lease options on a rehab that needs work.

Buy it on sub2, rehab it, resell it.

Or do a jv with seller, get a spoa to sell the house, in the jv agreement she gets paid when it sells.  You get private money for the rehab.  Get a listing agreement before the work starts to sell it it at 95 per cent of comps as a listing price.

Hi @Aaron L. 

Types of Seller Financing Arrangements

All-inclusive mortgage/DOT or Wrap Around Mortgage. 

Junior mortgage. 

Land contract. 

Lease option. 

Assumable mortgage (rarely exists now). 

ROFR - Right of First Refusal and a Lease.  

Getting Professional Help

Get a team - Broker licensed in your state, Lawyer, CPA, and RMLO.  

The RMLO, with Dodd Frank and the Safe Act, and changes to TILA, et al, the RMLO can steer you in the right direction on explaining Seller Financing to the buyer.

Tips to Reduce the Seller's Risk

Require a loan application. 

Allow for seller approval of the buyer's finances. 

Have the loan secured by the home. 

Get a down payment. 

Negotiating the Loan see www.BankRate.com and www.HSH.com -- 

Hiring a Loan Servicing Company See http://notecollection.com/

Hi 

@Ve'Ron Hall.

People care about financing and neighborhood as well as the house.

Craigslist and Postlet something like:

Owner will finance this property:

Description, location, terms.

Be cautious with Dodd Frank advertising exact terms as RMLO needs to disclose the exact terms.

Hi Nathan,

The paperwork for sub2 is involved and I am reluctant to go into huge detail here on a public forum, but...

"It is understood that the Property will be conveyed by General Warranty Deed (unless otherwise required) subject to taxes, existing zoning (unless otherwise specified in paragraph 16), covenants, restrictions and easements of record.

1. Total Purchase Price to be paid by Buyer is payable as follows:

A. Binder deposit which will remain as a binder until closing, unless sooner forfeited or retained,

according to the provisions in this Agreement. $________________

B. Additional binder deposit due within ______ days after acceptance. $________________

C. Balance due at closing (not including Buyer's closing cost, prepaid items or prorations) in U.S. cash or locally drawn certified or cashiers check. 

approximately.____ exactly ____ $________________

D. Proceeds of a new loan to be executed by Buyer to any lender other than Seller. $________________

E. Purchase money loan to Seller on terms set forth in Paragraph 2B. $________________

F. Other financing $________________

G. Existing mortgage balance encumbering the property to be [ ] paid off, [ ] taken “subject to”,

by Buyer (approximately). $________________

H. Net amount paid to Seller in addition to paragraph 1G. $________________

I. Total Purchase Price approximately ____ exactly ____ $________________"

-----------------------------------------------------------

Learning "piece meal in a forum contracts" is not the way to go.

Find a reia and ask for an attorney referral that knows sub2, lease options, land trusts, jv agreements, syndications, flipping, etc.

Your attorney is a major key in this REI Business.

Be cautious with sandwich lease options Vanessa, @Bill Gulley and I have been talking on this subject for a long time.

If you are dealing with free and clear houses, taking title via a private 1st mortgage - installment sale and renting or lease option is smarter than a sandwich.

Also on the selling on lease option side, watch out for rent credits, in other words do not do them, consider a ROFR, or right of first refusal, as Dodd Frank, SAFE Act, etc. has come into play.

Use a RMLO or Reg Mortg Loan Orginator with your buyers as per the ATR (Ability to Repay Rule) will bite you later if the buyer gets an attorney on a seller financed deal.

Dodd Frank is only if you are financing the buyer that lives in it; if you as an investor are negotiating with an investor (sub2, land contract, seller carry, etc), and you are not living in it, Dodd Frank doesn't apply (investor to investor). It would be prudent to state that you will not be living in it to protect the seller.