Do you need to own your home free and clear to sell it to someone else using owner financing? If not, how would it work?
Thanks,
Gary
I see it done all the time, just so you cover your mortgage and shoot for some profit. Of course, I wouldn’t tell the bank anything about it because I believe they will have the right to call the loan due if you sell FSBO even though they most likely would not, I would still not take a chance. You could also Lease Option it out as well, which would probably be easier and more profitable.
cruz
Disclosure: My opinion is just that, an Opinion!
That’s called a wrap…
You sell the property with your loan wrapped around the underlying…
For Instance you owe 80k on a 7% loan…
You sell and create note for 100k @ 10% wrapped around the underlying…
You make 3% on the 80k and 10% on the 20k paid out over however long… you have the deal structured…
Or you could use the extra to pay down the underlying faster…
So, in that instance… The underlying payment on the 80k would be $532.24
If structured over a 30 year loan…
The payment you would recieve would be $877.57
Now you could just take in the payment and cashflow… $345.33 every month…
You could also pay down the first… with all the payment… which in 130.45 months… the whole loan would be paid…
You would then have the full payment coming to you free and clear… and the balance on the loan they ow to you… would be 89,636.13
David Alexander
Thanks for the responses.
My question now is how do I do this without my bank finding out? What forms do I need to accomplish this process. I know knowledge is not cheap so if you could even just recommend a good book on the subject, I would be happy to check it out.
Thanks,
Gary
Arlington,Tx
I would suggest some of the subject to books John Cash Locke I believe is the best. The idea is to create a trust and convey the property into that trust. A warranty deed does the transfer. You would secure the note from the buyer with a deed of trust (wrap or all inclusive deed of trust). These two would be filed with the courthouse where the property is located. As owners are always changing names and using trusts as financial planning the mortgage will not trigger the DOS clause. Be careful with insurance as this is where investors have problems. Get Johns books and course as he has some really good advice. I wish it were legal to copy it so you could send me a copy too. He is really great here at this forum and also at TCI. Be glad to help with the forms if you need further assistance
Happy Holidays and Thank you,
Ted P. Stokely Jr
11505 Sw Oaks
Austin, Texas 78737
512-301-9171 home
512-587-6177 mobile
We No longer worry about the bank finding out…
We just sell to our buyer complete with a note an deed and trust…
You always take title to property with a trust…
But, that’s for other reasons… anonymity etc…
The banks calling any loans due… are really not a concern…
David Alexander