Posted by Craig on August 25, 2000 at 11:14:19:
JPiper,
Thanks alot, looks like I’ve got some research to do this weekend!
First deal - Posted by Craig
Posted by Craig on August 24, 2000 at 18:07:20:
FMV=62,000
Sales price=55,000
1st mortgage=45,000
Seller, who is a RE investor, wants 5k now and 5k in one year, and take over the note. Rents well, $200 positive cash flow per month. What concerns me is that seller doesn’t want to record the sale so I don’t have to pay closing costs on a new mortgage. Plus rate is better than I can get right now. What should I do to protect myself and what can happen to me in a “worst case” scenario?
I’m in Michigan, if that matters any.
Re: First deal - Posted by JPiper
Posted by JPiper on August 25, 2000 at 08:47:08:
Craig:
An unrecorded sale could enable the seller to further encumber the property, sell the property to someone else, etc etc. Not a wise move on your part.
To protect yourself you need something recorded. Best would be a property deeded to a land trust…with the beneficial interest in the trust then assigned to you. See the how to articles for details.
If you were going to do an unrecorded deal…then you need a performance mortgage to be safe…in other words, if you do what you say you will do, the seller will do what he says he will do…and if he doesn’t you have a mortgage that you can foreclose on to obtain title. Again, see the how to articles and do a search in the archives for more info on performance mortgages.
JPiper
Re: First deal - Posted by Craig
Posted by Craig on August 25, 2000 at 11:15:40:
JPiper,
Thanks alot, looks like I’ve got some research to do this weekend!!