Because of my situation, I am going to get stuck with 20% down required on a SFH that I intend to LO out. I am looking at properties that are 80k - 100k.
Anyway, I thought of trying to get the seller to carry 10% and wanted to know if any of these ideas are correct.
I. Carry 10% amortized @6% interest over 30 years but due in 5 years.
II. Carry 10% @5% interested for 5 years.
III. Carry 10% @6% interest amortized over 15 years but due in 3 years.
Just wanted to see if I have this owner carrying thing down right.
Wouldn’t the lender have an issue with the seller contributing so much and you nothing?
Glad to see I am on right track.
So you try to buy homes at full boat, with owner carrying difference on paper, which equates to a less down?
IE, home cost 300k. Appraised 330k. You buy at 330k. Seller does a 30k note to dismiss at closing (never even heard of this). The bank loans you 264k, so your down ends up being 36k or close to 10%.
Depending on the security that the seller requires (will the seller require that their financing is secured by the home as a recorded mortgage?). If the seller will carry as a private note or promissary note, then you will be OK. If the seller wants the financing recorded as a mortgage, then the lender will consider this a 2nd mortgage, and this would be a 100% loan, or 80% 1st/ 20% 2nd, and will be difficult to get done depending on your circumstances. Very few lenders will go to 100% combined financing on an investment property.
Because of my situation, I am going to get stuck with 20% down required on a SFH that I intend to LO out. I am looking at properties that are 80k - 100k.
Anyway, I thought of trying to get the seller to carry 10% and wanted to know if any of these ideas are correct.
I. Carry 10% amortized @6% interest over 30 years but due in 5 years.
II. Carry 10% @5% interested for 5 years.
[u]III. Carry 10% @6% interest amortized over 15 years but due in 3 years.
This one will not work with lenders they want it to be due no less then 5 years like the rest of your examples.[/u]
Just wanted to see if I have this owner carrying thing down right.
You have it down right have you thought about using GRANTS if you have a willing seller and there is room in the appraisal this is a great way of getting started in investing?
Hey,
To richmortgagebroker: I’ve been looking at getting a grant. How do I find a grant writing/consulting company that will do the investigating/finding/writing the grant for a % of the grant when it comes through. All I found were flat fee people with a ? guarantee. Thanks.
Peace,
Richard