Owner Finance ??

General Real Estate Investing
1

Another newbie here with a question - I am wanting to owner finance the sale my house which is in the Overland Park, KS area. I have a loan balance of $132,000 and will be selling for $162,000 with 10% down of $16.200. My question is what is the best way to set this loan up? Wrap-Around mortgage?

Thanks for any help in advance.

2

Howdy Toobizylady:

Yes a wrap is the best way for you. You want the entire payment coming to you so you can pay the mortgage to your mortgage company.

If they 1st is assumable and the buyer is strong enough to assume it and get your liability released then your best option would be to just carry back a second mortgage but still keeping tabs on the payments made on the first mortgage. If they buyer were this strong they could also get a new loan and cash you out completely.

I have been burned personally where I paid the payment on a wrap to find that the seller was in default on his mortgage. If you are the buyer it is better to pay the seller a second and take the first sub2 or assumption.

3

Thanks Tedjr !!

Is it best to set up an escrow account with a title company who would collect the payment and disburse the funds? Would this protect all parties from getting burned?

Thanks again,
Toobizylady

4

Howdy Toobizylady:

A lot of investors use escrow companies from what I have read in previous posts. I do not think title companies provide the service however.

5

hey everyone, im pretty new at this and am very interested in getting started, and have a few questions that need to be answered if possible…ive located a property im interested in, the price is around 589,000, its a 6 family unit each with 2 beds and 1 bath, average local rent is between 1100-1250, i was wondering if anyone had any adivce on financing, im looking to put as little down as possible (nothing if possible), and would greatly appreciate any adivce…thank you

6

Well… you are starting out big on your first transaction. This scenario will be classified as a commercial mortgage.

In order to get a little or no money down scenario you are going to need some secondary financing.

Good Luck!