Hi everyone,
More pre-beginner questions :biggrin
sorry if it isn’t a very smart one…
If I have 20 to 40% equity on condos that are in the red in a down market, and cannot sell traditionally, what is my best option? My interest on the loans is good at about 6% or so.
Lease to own or carryback? Or other?
How does equity should affect my options?
Would a buyer tend to be more serious about refinancing in a carryback situation?
Thanks again for your help,
Nereus
If by “in the red” you mean that the property is a negative cash flow proposition and that your negative cash flow is not a temporary problem that can be easily corrected, then selling the property outright would be my preferred approach.
A seller carryback has risk. The portion of the sale price that you agree to carry back will be a second position mortgage that could be completely wiped out if the lender in first position forecloses.
I don’t do lease options, so someone else will have give you their feedback on the viability of this technique and how this technique is affected if your real estate market is dominated by lender owned foreclosures.