Question on owner financing one of my properties...This Week!

General Real Estate Investing
1

Hello…
I currently have a rent house that a gentleman is offering to buy if I’ll owner finance. He has offerd a down payment, monthly payments and offered to pay taxes and insurance and fix any probs.
I currently have a mortgage on this property. Can I do this if I currently have a mortgage? Or, do I cover the taxes and ins., then up the payment to cover the taxes and insurance?..Or,…any advice would be greatly appreciated.

Thanks
GW

2

Yes you can, I’d do a Land Contract that way you still hold the title. As far as taxes and insurance go, aren’t they in your Mortgage payment? Anyhow if you collect more money for these to add to the payment for them than you will know for sure that they are getting paid. If you leave it up to the buyer then get proof every year.
On another note you should structure your Land Contract to make it sellable to a Note Investor. If you need more info. float me a mail.
Thanks, Herbster
PS check for a free ebook here on OWC its great.

3

Won’t the buyer have to get his own homeowners insurance policy? If you sell the property, you no longer have an insurable interest. After you sell the property, if there is a claim against your policy, the insurance will not pay.

4

Dave,

If you are carrying a note on the property secured by a mortgage don’t you then have an insurable interest, same as any bank?

5

Thanks guys. I would like a definitive answer on the insurance thing if anyone would care to offer more…

6

GWest,
If you let the Buyer get the insurance then make sure you are the benefitiary ( on a LC ).
Remember if the place burns down you want the money because you still hold title.
herbster
PS download that Owner Will Carry book. its free

7

If you are carrying the note, then you can be the mortgagee for the loss payee on the buyer’s homeowners insurance policy. As the mortgagee, the insurance company will notify you each time the policy is changed, or if the insurance is allow to lapse without renewal.

I got a sense from the thread that the seller would continue to maintain his own homeowners insurance policy when selling on contract for deed, just charge the buyer the cost of the premium. In this case, the policy will not provide any coverage because the seller no longer has the insurable interest that he had when the policy was written.