I’m looking for some sage advice from any experienced investors. Please tell me the advantages of owner financing your residential properties. I have a property with about $90K in equity. Looking into selling, L/O or OWC options to be able to have cash to acquire next property. I buy/flip cosmetic fixers. Thanks.
Babs
Ladybabs. I am in Vegas as well.
Anyway, if you want to owner finance your equity and then sell the note, that would be the best way to get cash so you can move on to your next deal.
Example:
FMV = 200K
LOAN AMOUNT 110K
90K IN EQUITY
SELL OWC 210K WITH 20K DOWN AND WRAP THE 190K AROUND THE EXISTING 110K LIEN.
Now you season the loan a bit and then sell it at a bit of a discount, depending on the credit of the payor and other intangibles. You might be able to get 175k for it. At close the 110k is paid off and out of your name and you would walk away with 65k in cash.
Question: Would that be enough to get your next deal done?
Hope this helps and have a great evening.
Warmly,
THENOTEDETECTIVE
Ladybabs:
I am in New Jersey.
Can you pay off the loan? That would increase your equity.
Regards, Frank
So you are saying in order to sell my note (using this example) it will cost me about $35k for a quick cashout? :-\ How do you come up with this figure?
Babs
Remember you got 20k in cash down and 65k later on. That is 85k. Where did you come up with your 35k figure?
As you know, when you sell with owner financing, you can hike the price about 10%. That gives you some leeway there as well. Tou get the 20k down, and cash out your note, like stated.
Hope this helps and any questions feel free to ask. Right here in Vegas!!
Warmly,
Richard P. Belliveau