Nancy:
When interest rates are very low, and the mortgage lenders are making it very easy to get financing, along with properties located in hot real estate markets you are correct it is a rarity that many property sellers will consider owner financing - Because they don’t have to!
However sometimes a property needs to be sold quickly or marketed more aggreesively than the the traditional list it and throw it in MLS allows… That is where offering owner financing can distinguish YOUR property from the others…
As for marketable Notes and how to create them; pay a visit to; http://www.sunvestinc.com/register.htm to read some of the FREE REPORTS and specifically the one on “Creating Marketable Notes”
There really is a “Art” rather than a science to structuring these deals as to “optimize” the seller financed “paper” and its cash value if sold or converted into a lump sum.
I have a property valued at 75000. I would like to owner finance it to my brother who score is 560. Could i sell the note without taking a big discount.
Roy:
I wish the answer were that simple… For instance you have not addressed any of the following issues:
What is your brother putting down in cash?
Will he be living in the property or is this an investment?
What does your brother do for a living? Does he have stable employment and income from other sources?
Clearly a 560 credit score is a marginal credit score, WHY is his credit blemished?
A 560 credit score borrower is also not a 90% LTV borrower - so are you willing to consider carrying back (2) two notes - a 1st lien at a more conservative startig LTV threshold ? along with a smaller 2nd lien you would retain?
Was this property a recently “rehabbed” home? Is so, WHEN did you acquire it ? and for how much? What have you done to it since your acquistion to enhance its value?
These questions or issues would have to be explored by any prudent investor that might consider the purchase of your owner financed Note that involves your brother as the Note payor…
Michael,
I’ve been checking out your website and is interested to learn more about notes.
I’m new in REI. Most people in Los Angeles don’t carry notes. Houses with OWC becomes very attractive, as houses are so high priced and many can not qualify.
If I were to sell house with Owner fiancing, asking for at least 10-20% down, then trying to resale the note to your company at closing, what are some of the requirement you need from the buyer/property/note?
is there a standard table that I can use to determine what kind of home sales price and term I should use to ensure maximum price when I sell the note upon closing?