Hello All;
I am doing my 1st owner Finnace deal and need y’all HELP…

-the owner/landlord as a 3/2 for sale.
-She owes $94.000 on the current loan
-Her mortgage is only $800
-She is willing to sell it to me on a LAND CONTRACT aka Agreement for Deed.
-She’s asking for $1,000 dwn and Pay 2007 poperty taxes=$2221 at closing.

The problem i am having is that I don’t know what are all the Forms needed to do a LAND CONTRACT/AGREEMENT FOR DEED.

I have write a proposal and presented it to her and she accepted the terms online in the proposal.



The very first thing you should do is determine how you will make money with this deal. Just because someone will sell you a property does not mean that buying it is a good idea. You didn’t say what the comps were and what the rents were?

Good Luck,


My comps tell me that the property is worth between $110,000 as is and $120,000 after rehab.
Rehab consist of updating = $5 - 8,000.

-My plans are to move in and live there for 3 to 5 years or rent/lease it for $1200-1300.
-Atleast that’s what the current owner was renting it to Section 8 tenants for.-
-With her current mortgage @ $1,000 (PITI) and cents she had a positive cashflow of $200 monthly

Again, i need assistance with what kinds of documents i must have her sign to seal this deal via AGREEMENT FOR DEED/LAND CONTRACT.

OK, Just call some closing/settlement companies in the area and ask them if the do land sales contracts. Not all co. do them - just don’t pay any excessive fees since this is a easy transaction. You should pay around $500.00 in closing costs although fees do vary and it pays to shop around. Usually if you have any judgements against you the seller has to be notified of this. The settlement co. can assist you per the terms and agreements and you can read a standard form which can vary from stste to state. Hope you make it work the way you want…

This deal is a big loser. Renting this property for $1200-1300 per month will result in a negative cash flow. I certainly would not do that!


Purchase price - $94,000
Rehab - 8,000
Total Invested - 102,000

Worth - 110,000

Instant Equity - 8,000

My question is, WHY are you getting so excited over 8,000 equity? You are buying at 93% of the value. Hardly a deal in any investors eyes.

Keep looking or you will inherit this person’s problems.

Good Luck


Jesmar is exactly right. This is one of those strategies that is left from the boom period. During the boom, there were “gurus” running around touting a strategy of buying at retail and then “selling” the property at greater than retail via a lease option or land contract. This strategy is all but obsolete after the bubble burst.

In this environment, you should be finding GREAT deals, not just another retail deal with the owner offering some sort of owner financing.

Good Luck,


There are times when you want to pinch the pennies, and other times when cheap equals foolish.

If you are gping to do this deal, you do not get a free form off the internet. You have a really good lawyer draw up the dicuments, so that you are fully protected.

You want to be absolutely sure that she owns the property, that there are no undisclosed liens, and that she can not borrow more money against the property while your deal is on-going.

You don’t want to have your house raked back in by the bankruptcy courts if she declares bankruptcy. You want to make sure that the payments you make are actually going towards the mortgage and not into her pocket.

One thing I would suggest would be to set up an escrow to handle the monthly payments. Any escrow company can do it, and the service is cheap.

Then you send your check to the escrow company and they send it directly to the mortgage company. Also, they keep track of how much you have paid, which is very useful if you make a few extra payments.

Make sure you have a way to pay for the house if the bank calls the mortgage due when they find out she’s sold it. Also, pay attention to make sure it is fully insured.

I am not going to try to evaluate whether this is a good deal or not, because I don’t know real estate in your area.

Now, I can see where this would not work as a rental or rehab project. But i also said that I would move in and stay for 3 years, no one has said anything if it’s a good idea or not.

Thanks for all the post but also my question regarding the proper forms to use when dealing with a Agreement for deed/contract for deed was not answer. Will someone please assist me with this question?

again, thanks for y’all the feed back…

Depends upon what the Austin real estate market is doing these days. Is your market appreciating, moving sideways with prices this year the same as last year, or is your market declining?

What is your cost of renting vs your cost of owning this property?

I would say occupy as your primary residence for the next two or three years IF your market is appreciating, AND, if your cost of ownership is less that your cost of renting.

If you can rent a comparable property for less than the cost of homeownership, then why buy if your property will not see any appreciation over the next couple of years.

If your holding period were longer, say seven to ten years, then I might say to buy now while prices are low and capture the free profit when you sell in ten years, but I don’t think you need to be in any hurry to act.

Don’t worry about the forms right now…YOU"RE NOT BUYING THIS HOUSE!!! :banghead


We love you.

The majority of your responses are telling you to stay away from this deal. Trust the experience of those who have been there and done that.

Also, given the credit crunch that is wiping out whole industries like bankers and builders etc. you can expect the housing market to go down for the next 5 to 10 years, (my opinion).

Whether rents stay up or go down is yet to be seen, so be ready for the worst.