OK - this seems like possibly a stupid question, but here it goes…
I have a house that I rehabbed and planned on selling - no such luck. I did have one offer to purchase - they have tons of cash but they do not have a SS# and couldn’t get qualified for a loan. I have some options:
Rent it out (start from scratch)
Lease/Option to these non-ss# people
Owner Finance to these non-ss# people
My question is - if I currently have a mortgage on this property, how do I Owner Finance? Is it possible? Do I have to pay the mortgage off first (which isn’t going to happen unless $100k falls out of the sky). Any suggestions for resources? Or would a L/O be an easier solution? With no credit history, are they too high-risk?
Natalie,
If this is happening quickly, which it sounds like it is, then it’s probably best to get help. There’s too much to learn in too short a time.
I typically offer all those options on my vacants now as I’d rather just get someone in. The underlying financing doesn’t really matter.
As far as risk, it’s a balancing act of carrying costs versus waiting for a quality family, and it’s your call.
For resources, Bronchick’s Alternative Real Estate Financing covers a good portion of the owner financing basics and includes forms. His Lease Option course does the same for that topic. However, if you get a knowledgeable attorney to do this one, then you’ll have some docs.
Thanks for your response, and you are right - I am needing assistance pretty quick.
So, if I have an existing mortgage on the property - the Owner Finance scenario would be a wrap, right? or Contract for Deed? I have seen these terms many times on this board, but have skimmed over them because I was focused on other topics. I can’t do CFD in Texas, right?
Don’t ever sell on a contract for deed!! The new laws favor the deadbeats, and not you.
When do you want all of your money? If you do want it all in 2-5 years, are they going to be able to refinance and get a loan without a SS#. There are very few lenders who loan w/o a SS#.
Lease Option to sell it would be best. You keep the deed, the tax deduction and the depreciation. If they don’t pay, you can evict vs foreclose. Without a SS#, I would get 10% down. It will make it easier for them to refinance, and, if you need to evict, better for you.
Manyrehabbers that I work with choose to sell the rehabilitated property with owner financing. Then, either at closing or sometime in the future, they will sell a portion of the owner-financed mortgage, or the entire mortgage.
By selling part of all of the mortgage, they get cash to pay-off the underlying mortgage and get them started on their next rehab project.
I would be happy to discuss your situation and provide you with a quote on your proposed owner-financed mortgage. Send me an email at rmshoemaker@hotmail.com.
Here is some info that may help you out of your delima. I met a person last night at an Investors meeting that gave me the name of a mortgage company that is specializing in loans for buyers with no SSN#. I haven’t talked with them myself but I’m sure it would be worth getting more info on. In the meantime I would lease option the property to the buyer while they work on getting qualified for the loan. Don’t do a contract for deed. My lawyer has advised me that due to fairly recent changes in regulations, selling on a contract for deed without jumping through the right hoops is opening yourself up for a good lawyer to just come in and take the property from you. Here is the info below. Hope it helps.
American Homefront Mortgage
Maria Delgado Evans VP/Loan officer
339-1752 office
9101 Burnet Rd Ste. 106
Austin TX 78758