Owner Financing on Single Family Homes

[Kent Harris]

I've purchased 15 rental properties in the last 3 years and want to sell off all my 4 bedrooms since for the most part they have been problematic. In the Houston area the rent rates have gone down 15% since last year. The $1,750 a month 4 bedroom houses are now renting for $1,495. Also the 4 bedroom houses were selling for $205,000 last year are now selling for $185,000. 

I want to owner finance these homes to keep the cash flow moving, I have read the laws about it and pretty much you need a Loan Originator ($750 Fee) and a fee attorney to follow Dodd Frank guidelines. I also found escrow companies to hold escrow and pay the lender. My question is can't I just setup an escrow account at the bank and only use it for Taxes, HOA, Insurance and Mortgage payments? The reason I don't want to use an escrow company is the person doing owner finance has until the 15th of the month to pay the Mortgage. I pay my Mortgages on the 10th of the month. The Escrow companies I have talked to will not hold 2-3 mortgage payments in escrow, making my payment always late.

Also what should the down payment be? What qualifications should I use?

The going rate in Texas for owner finance is 9.9%. My first house I want to owner finance will go for $159,600. At 20% down or $127,200 at 9.9% interest the Mortgage payment will be around $1,100 a month. Still cheaper then rent. 

Kent,