Owner Financing a Flip

[Brian Orr]

Hey all,

Curious if anybody has experience or advice on this. I'm wondering if I should consider a rent-to-own strategy, or maybe an owner finance strategy for my post-renovation properties. Are these dangerous waters to wade through? Or could I possibly be setting myself up for higher returns in the long run?

[Bill Gulley]

Brian, Dave is about 10 years behind, he's still in the predatory mind set of charging more for financing and the ability to take it back and do it someone else. Seller financing has been discussed here to great extents as well as the newish Dodd-Frank requirements. As a rehaber, doing construction on a house and seller financing to an occupant, you can't, same goes for any rent to own junk or lease-option to purchase without greater scrutiny than what investor types have done in the past, including last year. 

Before you strike off with an opinion or suggestion from just anyone, you better study the changes, I'm talking federal laws with penalties you don't even want to think about!

Now, if you lived in the home, were not in the business, there are exceptions that allow seller financing. You can seller finance to another investor as a commercial loan, but you're speaking about consumer financing.

As I said, read here on BP, there are a few, not many, who know seller financing as it is required to be done today so be careful about what you read on line. Good luck :)