Comments on: Seller Financing is BAD – Right? http://realestateforfunandprofit.com/seller-financing-is-bad-right/ Sun, 25 Dec 2011 21:55:17 +0000 hourly 1 http://wordpress.org/?v=3.2.1 By: Cheri http://realestateforfunandprofit.com/seller-financing-is-bad-right/comment-page-1/#comment-6 Cheri Thu, 02 Apr 2009 19:41:58 +0000 http://realestateforfunandprofit.com/?p=64#comment-6 Good basic article I am now starting to invest again. I have found is rare to find property with owner financing, as a buyer. As a buyer it is often ideal though it can take more down up front. I would like to add a couple of caveats and a great advantage to being the one to owner finance which comes from my experience when I owned several rental properties in the early 70's. you get interest payments over time for long term cash flow. Caveat 1: make sure your interest on the loan you pay is less than the one you recieve. Cavaet 2: make sure the term on their loan is longer than yours; you do not want to make payments on a loan after you have given over the title,or to have your seller payoff be larger than buyers if they resell in a short time. Cavaet 3: If you want long term income with large payments in the future, have some kind of prepayment clause with a significant fee. Caveat 4, have some kind of escrow company recieve payments so that amoritization is calculated correctly and missed payments are fully noted. Here is my story, and this is why it is good for the seller if you are in the right position. My hubby and I bought several multi-unit builtings from a tired landlord. We bought each building at different times over several months from the same person with less and less down. We had land contracts with her. She owed little or nothing on the properties. Over 4 to 5 years we managed and improved the property and the quality of renters with increasing rents. Then began to sell them as we were now tired landlords and stressed out. ON the buyers side this is cavaet 1: Be sure to keep cash in a set aside account to pay for large items like taxes and major repairs like roofs and furnaces. Buyers Caveat 2; Some states use different contracts for this type of financinf. So be sure you check this and probably use a lawyer. Do not rely on just the title company. States vary widely. Timing in 1973 was bad for selling, there was a major banking crisis and interest rates went over 15%. We sold for about 12% interest to attract buyers and wrote the contracts to cover our payments as above. Trouble was, the smaller buidings were remortgaged by the new buyers before the year was over. We did not even have time to sell the paper and had to cash out our contract with our seller. We also did not get large enough down to cover any problems with buyers who got in trouble making payments. Those who got into trouble were Real estate agents and bankers who were looking to invest...but their business was going in the tank...not a good risk. The underlying contract owner foreclosed on our buyers, because we did not have the where-with-all to do it ourselves. She was a great winner...She had us manage and improve her properties and pay her while doing so. Then she got them back and resold them for the same or better prices than what she sold to us for. And since now they were free and clear, she retired happy; I got divorced, and now years later I want to own rentals in my retirement. So, I would love to find someone who will sell with owners terms. Good basic article
I am now starting to invest again. I have found is rare to find property with owner financing, as a buyer. As a buyer it is often ideal though it can take more down up front.
I would like to add a couple of caveats and a great advantage to being the one to owner finance which comes from my experience when I owned several rental properties in the early 70′s.
you get interest payments over time for long term cash flow. Caveat 1: make sure your interest on the loan you pay is less than the one you recieve. Cavaet 2: make sure the term on their loan is longer than yours; you do not want to make payments on a loan after you have given over the title,or to have your seller payoff be larger than buyers if they resell in a short time. Cavaet 3: If you want long term income with large payments in the future, have some kind of prepayment clause with a significant fee.
Caveat 4, have some kind of escrow company recieve payments so that amoritization is calculated correctly and missed payments are fully noted.

Here is my story, and this is why it is good for the seller if you are in the right position. My hubby and I bought several multi-unit builtings from a tired landlord. We bought each building at different times over several months from the same person with less and less down. We had land contracts with her. She owed little or nothing on the properties.
Over 4 to 5 years we managed and improved the property and the quality of renters with increasing rents. Then began to sell them as we were now tired landlords and stressed out. ON the buyers side this is cavaet 1: Be sure to keep cash in a set aside account to pay for large items like taxes and major repairs like roofs and furnaces. Buyers Caveat 2;
Some states use different contracts for this type of financinf. So be sure you check this and probably use a lawyer. Do not rely on just the title company. States vary widely.
Timing in 1973 was bad for selling, there was a major banking crisis and interest rates went over 15%. We sold for about 12% interest to attract buyers and wrote the contracts to cover our payments as above. Trouble was, the smaller buidings were remortgaged by the new buyers before the year was over. We did not even have time to sell the paper and had to cash out our contract with our seller.
We also did not get large enough down to cover any problems with buyers who got in trouble making payments. Those who got into trouble were Real estate agents and bankers who were looking to invest…but their business was going in the tank…not a good risk. The underlying contract owner foreclosed on our buyers, because we did not have the where-with-all to do it ourselves.
She was a great winner…She had us manage and improve her properties and pay her while doing so. Then she got them back and resold them for the same or better prices than what she sold to us for. And since now they were free and clear, she retired happy; I got divorced, and now years later I want to own rentals in my retirement. So, I would love to find someone who will sell with owners terms.

]]> By: 4now4ever http://realestateforfunandprofit.com/seller-financing-is-bad-right/comment-page-1/#comment-5 4now4ever Fri, 27 Mar 2009 06:58:07 +0000 http://realestateforfunandprofit.com/?p=64#comment-5 good luck 2 all.so far, i have been able 2 hang on 2 my house.lately,drawn by the falling housing market,i've been tempted 2 get in2 real estate investing.if any of u can share any info,pleeez do.thanks,God Bless. good luck 2 all.so far, i have been able 2 hang on 2 my house.lately,drawn by the falling housing market,i’ve been tempted 2 get in2 real estate investing.if any of u can share any info,pleeez do.thanks,God Bless.

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