Owner financing
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Owner financing (by Mark [PA]) May 29, 2023 2:09 PM
       Owner financing (by Robin [WI]) May 29, 2023 3:09 PM
       Owner financing (by Jennings [IN]) May 29, 2023 4:10 PM
       Owner financing (by Ken [NY]) May 29, 2023 4:16 PM
       Owner financing (by DJ [VA]) May 29, 2023 9:03 PM
       Owner financing (by Oregon Woodsmoke [ID]) May 30, 2023 9:54 AM
       Owner financing (by BRAD 20,000 [IN]) May 30, 2023 1:38 PM
       Owner financing (by BRAD 20,000 [IN]) May 30, 2023 1:40 PM
       Owner financing (by zero [IN]) May 30, 2023 5:21 PM
       Owner financing (by Sandy [CO]) May 30, 2023 7:23 PM

Owner financing (by Mark [PA]) Posted on: May 29, 2023 2:09 PM

I am 70 years old and own a three bedroom, Rowhome, in Brookhaven Pennsylvania and have been trying to sell cash as is. One investor has offered me my asking price, but wants me to hold the mortgage on the property. What are the pros and cons? --71.230.xxx.xxx

Owner financing (by Robin [WI]) Posted on: May 29, 2023 3:09 PM

Pro: helps spread the tax hit across multiple years. Passive income that could be higher than a CD.

Con: they default. You have to foreclose and it costs $$$$$.

This is a seller's market. I have to believe someone will come along who will give you what you want. --104.230.xxx.xxx

Owner financing (by Jennings [IN]) Posted on: May 29, 2023 4:10 PM

I have sold several on land contracts. Check out the buyer to make sure they have good credit. Try to get 10% down. I charge 8 = 10 % interest. On a land contract they can sigh it back to you without going to court. Some sellers have them sign the release when they purchase without dating it. That way if they skip out, you can still record the release and get the property backss. I have never done this though. --68.38.xx.xx

Owner financing (by Ken [NY]) Posted on: May 29, 2023 4:16 PM

Jennings,dont file the land contract and there is nothing to sign back over. If it does get filed any judgments against the buyer will attach to your property --74.77.xx.xx

Owner financing (by DJ [VA]) Posted on: May 29, 2023 9:03 PM

If I was in your position, I would want to know the buyer is an experienced, successful landlord.

See if they are willing to show you what they have now, and what profit they are making.

Any loan underwriter would examine their financial situation, and you should too. If they resist, they don't buy it - unless they come up with the cash.

One option would be to give them a sandwich lease and an option to buy. If they are successful, then they prove themselves worthy of seller financing.

If they fail, you evict rather than foreclose. --68.229.xxx.xxx

Owner financing (by Oregon Woodsmoke [ID]) Posted on: May 30, 2023 9:54 AM

Have you listed this with an agent who specializes in investment property? Believe me, there are buyers for fixer-upper properties and an agent can probably get you a better deal, either more money or better terms, or maybe both. --76.178.xxx.xxx

Owner financing (by BRAD 20,000 [IN]) Posted on: May 30, 2023 1:38 PM


A few different routes...

First understand this is a normal way to offer. I do it when buying. Some sellers accept it and I got in without spending my money.

Next consult your CPA. The IRS ALWAYS gets paid.

BUT also realize this person might be totally broke with bad credit, cannot get a bank loan, blowing smoke.

If you sell and hold a MORTGAGE you can make monthly interest money cash flow which can be passed to your spouse or heirs.

BUT...the IRS says you sold the house so you owe all the capital gains and depreciation recapture on April 15.

For homes I have held over 27.5 years I estimate 34% of the sales price going to Uncle Sam.

If I took this route I should have that tax money set aside.

In Indiana a LAND CONTRACT or CONTRACT FOR DEED keeps me as the owner until they have paid the entire amount. They have a "grey" ownership meaning they can buy new windows and have a lien placed on "my" property. Their teenager can kill someone with a car and have a lien will be put on my property. We are "partners" to a degree.

You pay pure income tax on the interest earned and capital gains, etc on the Principle paid each month.

Right now local investors are snatching up ANYTHING that looks like a house. They know the higher ARV - after repaired values. They have cash or good credit to get a loan and buy you out.

Don't act on free internet advice. Consult CPA and Atty.



Owner financing (by BRAD 20,000 [IN]) Posted on: May 30, 2023 1:40 PM


Sometimes contract buyers are stubborn - they don't want to lose their home - and you must file foreclosure.

In Indiana that costs about $5000.

BRAD --73.103.xxx.xxx

Owner financing (by zero [IN]) Posted on: May 30, 2023 5:21 PM

I did not realize it was that much for a foreclosure. I have a few places that I am selling on contract. One I have no worries about. The other two I have very little worries about, unless the buyer kicks and his spouse decides to play games.

Interesting tho --107.147.xx.xxx

Owner financing (by Sandy [CO]) Posted on: May 30, 2023 7:23 PM

I've done many Lease-options rather than owc.

Eviction is quicker and less expensive than foreclosure, at least here in CO.

Another option is to 1031 into a property you'd like to pass down. You could eventually switch it from a rental to a family summer home or a house one of your children would like to live in. Or even farm land that you rent out to a local farmer --87.249.xxx.xx

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