Can I refinance from a Contract for Deed (Land Contract)?

I am in Texas and have been eyeing 2 properties. One is a fourplex and the other a triplex. The potential rents are verified and there needs to be very little work done to make them rent ready. The potential net cash flow after all expenses is $200.00 per unit per month. I don’t have a lot of ready cash so I want to buy them under a Contract for Deed for a short period of time from the seller, who had it listed for a few months, but is getting impatient.

I am willing to offer full asking price for his units if he can agree to the CFD. This contract would only be subject to the inspection, title transferability and the appraisal coming in at or above the sale price, and of course, my attorney’s review.

My question is, can I get the multiplex refinanced at 100% from a Contract for Deed?
Has anybody done this before?
If so, what out of pocket did you pay? For what expenses?
Can you reccomend any lenders that do this?
Are some lenders forcing borrowers to pay a percentage to finance from a CFD, similar to a new first mortgage?
What is the seasoning period to refinance from a CFD?

Any help or information is greatly appreciated, I know that there is a lot of Brainpower in this forum.


Yes you can refinance from a contract for deed. Most lenders will want you to have some seasoning on title to let you take advantage of built in equity. The shortest amount of seasoning I have seen is 6 months, but you may find a lender that will allow for a shorter term.

If your paying full price it would be difficult to then refinance immediately for 100% on a nonowner occ. property. You will likely have to wait 12-18 months to meet the seasoning requirements for a 100% refinance.

What you may want to do is try and find a property that is a really good deal (motivated seller) and buy it CFD at maybe 80% of mkt value. Then with some equity in the property you will find lenders who will wave the seasoning requirements and refy immediately.

unless your seller owns the properties free and clear he cannot sell to you on a CFD in Texas. you can try a L/O but there are limitations on this as well in Texas. Best for him to carry a wrap around mortgage in an AITD (all inclusive trust deed) for you. the bonus in your court is that the properties are in your name already and your seasoning issue goes away when it’s time for you to refi.