HELP!! I need creative ways to sell my condo...

I have a property that will not sell traditionally due to horrible market conditions. I just want to get rid of it for what I owe. I’m exploring selling it with 100% owner financing. My question is what are some ways to do that, and not have to give up the deed? Or do I have to give up the deed? Here are some things I’m considering-

  • Sell it subject to, let buyer take over my payments (but in this case, i have to give up the deed, right?)

  • Wraparound mortgage - hold onto the deed

If I do have to give up the deed, do I first need to first transfer the deed into an LLC or a Land Trust and assign the buyer interest to the property that way to avoid the existing lender from find out?

Thanks guys.

In both cases, selling Subject To and selling with a wrap-around mortgage, title is transferred to your buyer.

In your position don’t sell Subject To unless you are so up against the wall that that is the only way out.

Selling on Contract for Deed (Land Contract) is the deal where you hold title until the contract is satisfied and your underlying mortgage is paid off.

Offering a lease option, may eventually get the property sold. While you are waiting for your buyer to exercise his option, his rental payments to you should be covering your mortgage and condo fees. Title does not transfer until the buyer exercises his option to purchase.

What are the market comps for your property? If your property is priced higher than the market will bear, then you have to lower the price. If you are upside down (your loan balance is more than the property is worth), contact your lender and ask for their short sale package. Sell for less than it would take to get out from under your mortgage, provided the lender won’t seek a deficiency judgement or try to get you to sign an unsecured note for the short sale deficiency balance.

You don’t tell us where this condo is located or why you want to get rid of it. Is there a viable rental market for your condo that will let you use rental income to subsidize the mortgage and association fees until the market gets better? If doing so means you have to accept a small negative cash flow every month, can you afford to do that ?

What Dave said.
Your best approach is to sell your property via a Rent To Own. Offer a generous rent credit to get the phone ringing. If the option to purchase isn’t exercised, so what? Do it again. In the meantime, you retain title and all benefits of homeownership and, more importantly, you are getting your mortgage covered with rents received.

Dave T, Thanks for all the info. Here are some more details about the property and my situation.

The condo is located in Orlando, Florida. I owe $185,782. I paid $212,000. There is a major over supply of condos there. Fourclosures left and right. Lots of investors just like me tried to speculate and are loosing big time. I have a renter now, paying $1,100/month. My mortage is interest-only, taxes, and insurance, monthly is $1,855 and Condo fee is $225. Total monthly COO is $2,080. My monthly NOI is ($980), and this doesn’t factor in any other costs (vacancy, maintenance, etc).

There is one pre-fourclosure in the same community and same model as mine, that was priced at $132,000. Not sure what it closed at.

I don’t see how a lease-option would work, because I don’t think lease-options can charge that much more above market-rent for rent credits. The rental market is $1100 a month, how much more could I charge over that?

What I am contemplating doing is to contact my renter, and offer him to buy the condo at what I owe via a Land Contract (thanks for that suggestion). If they want the title, I may have to conceed to that. What’s my risk then? They default on payments, I default on my payments to existing lender, existing lender fourcloses. I can accept that risk.

Regaurding short-sales, (maybe this is a quetsions for the short-sale forum) lets assume my renter doesn’t want to take my offer. If a lender looks at my finances, techincally I can affort the payments. Do I have to some how show that I can’t afford the payments for the lender to consider a short-sale?

Regaurding Jugdements, what are lenders doing these days when investors that speculated lost and are entering fourclosre? I have other properties. Should I try to hide my ownership in those properties to prevent them from trying to put liens on them?

Thanks. I appreciate the advice.

If buyer has title, then you don’t have a Contract for Deed. In essence you have a wrap-around mortgage. If the buyer defaults, then you foreclose on the property or take the deed back in lieu of foreclosure and sell the property again.

If the buyer defaults and then your default results in a foreclosure, it is your credit score that will be dinged between 200 and 300 points – not your buyer’s. The foreclosure will stay on your credit report for seven years, your buyers will be clean. After a foreclosure, it will take you 36-48 months of credit repair and good credit history to get another mortgage with decent rates.