All Forum Posts by: Shera Gregory

I am selling a property with seller financing. I don't know how to estimate what this might be worth to sell as a note in a couple of years if the payments are made on time. Here are the details:

Original loan: $28,000 at 6% for 12 years.

House: 3BR 1BA SFH in small town in IL. Not a lot of sales so hard to estimate value. Maybe in the $35,000 range after the repairs that are being done currently.

Buyer has fair, not good, credit.

I plan to have a loan processing company handle the collection of payments and escrow. After 18 months or so when the balance due is around $25,500 is it reasonable to expect to get over $20,000 or is that out of the question? What is the determining factor for what the note would be worth? House value? Loan balance? Buyer credit? Other?

Hi @James Sigsbee -- I've been looking at this some more and I may wind up using a loan servicing company. The fees are $30 per month total if you do an escrow with a small initial setup fee. The reason I decided to do that is I may want to sell the note in a couple of years and it will be more valuable if it has been professionally managed all along. 

I found a couple of good threads on BP searching for "loan servicing" including this one:

http://www.biggerpockets.com/forums/70/topics/115651-loan-servicer

Shera

Thanks @Micki M. -- that does look like a good option. I am realizing that my low price point ($28,000 loan) makes the fees seem a bit high but it would be very reasonable for a higher loan amount. I do plan to escrow for I&T so that's $30 total per month plus the initial setup. Not bad if I do sell it in a couple of years. Kind of an "ouch" if I held it for the full 12 years. Thanks again!

I am in the process of using seller financing to sell a house. At some point I may want to sell that note to get at least some of the cash out of the deal. I heard that it would be easier to sell the note if it has been administered from the beginning by a third party. Does anyone have experience with this? Do you agree with that point? If so, any recommendations on companies I can contact who would collect the payments on my behalf? This is in an IRA LLC by the way. Another reason to want to be more hands-off.

Hi @Mike Wasch 

You can check out Dodson Property management. They seem to be well suited for a small size property portfolio. One of the BP members, @Gregory Montalto is a manager with them.

Shera

Hi Dom. Good to see you on BP! See you at the Richmond REIA soon.

Shera

Oops .. too late for me too! I was signing in to recommend @Jon Deavers 

Do give him a call. He's very in tune with the investor mindset and also knows the investor scene in Richmond.

Shera Gregory

Congratulations Dan! I've not used Michael and Sons but they seem to be going after a big portion of the HVAC/plumbing market in our area. That's usually what will require "emergency" maintenance. Unless someone kicks in a front door (not unheard of for sure) I don't think you'd need an emergency handyman. I've also found that it can be difficult to get a good HVAC person to respond quickly if you haven't also done some high $$ business with them such as purchasing a heat pump, furnace, etc. 

If you decide to split the trades let me know. I have a good HVAC guy but that's all he does. We needed some emergency plumbing on one rental and actually came across a pretty good guy via craigslist. So, again, if you decide not to try for a one-stop-shop I can give you his name too.

Shera

I live in Virginia and have contacts for doing business here. But I also own a SFH in Atlanta Illinois that I obtained through a tax lien / foreclosure. I am in contact with someone who is interested in buying the property as an owner occupant for around $27,000. It is likely that we would need to do seller financing. I will need some help with the contracts for the sale and financing. With this one deal I don't think it would be necessary to use a RMLO but that is an aspect I would like to discuss as well.

In addition to posting here, please feel free to call me at 804-814-6443 or PM if you are interested or have a contact to recommend.

@Roy N. -- that makes a lot more sense (re: HGTV and Canada). Interesting about the Income Property show -- that one always has me scratching my head. And with even shorter terms on the mortgages in Canada it's hard to see how those "basement apartments" that seem to be all the rage will cover as much of the mortgage as the show claims. Still fun to watch though.