A twist to Owner finance

[Alejandro Flores]

So I bought a house with No money just 2,500$ for closing, my lender is giving me 100k at 7% interest for a year.

Bought the house at 63k putting in 25-30k into the house and once I fix it up I'm thinking of refinancing it with a bank. The appraisal will say it's worth 120-130k. The bank will loan me 75% LTV, I'll put if any what's left to pay (I'll have 60-70% equity)

Since it's my first house ever bought I'm going to take the advantage of first home buyer where I can get pretty low interest. 

Then set the property for sale by owner with owner finance at 145k, ask 10-15% down payment with a higher interest rate (not too much). I'll put 5-year ballon. 

Get a real estate attorney to give me the right papers and protection. Once I have a buyer set up, I'll set up a loan service company to manage the payments. I'll get paid the down payment and cash flow will come in.

Let me know if there is a mistake or something where I can do to improve!

[Cortney Jones]

@Alejandro Flores, good plan, but you do need to think about what @Paul G. stated. If you're using the new home buyer program, it's an FHA product, unless your broker has something new? With FHA you have to live in it for a year.

You can absolutely do owner financing on a property that you don't own free & clear, but not one that you've signed a sworn affidavit to live in for a year. :-)  

If your lender is using something other than an FHA product, then you should be good. Definitely have everything drawn up by an attorney. Also, your attorney will want to put wording into agreement that your loan to new buyer is wrapping around existing loan for disclosure purposes. I would also recommend a clause that states the buyer agrees to surrender property willingly to you after 2 months of late payments. Doesn't always work, but sometimes gives them the out they need.