Owner Financing to Owner Financing - Head Spinning

[Ryan Pozzi]

Hey BP fam!  I'm trying to put a deal together that I hope looks simpler to y'all than it does to me.  I keep trying to put pen to paper and figure out both sides of the equation and I keep ending up frustrated.  Here's the deal:

My JV partner and I have been managing a property whose owner now wants to sell it to us. She's agreed to a great sale price - just over 70% of its appraised value in a warmer than average market - but she insists on owner financing. I don't have a problem with that, but we were interested in acquiring the property specifically so we could write a lease option contract or something similar with the current long-term tenants, who have had trouble qualifying for financing but who want to buy the property. Those tenants have agreed to buy at 100% of appraised value if we can be more flexible about the time frame of their eventual purchase. She (the current owner) agreed to sell to us instead and let us deal with them because we can deliver a down payment immediately and she wants to move on to a new town ASAP.

It's possible I'm just not getting my head around it, but all those conditions make it sound like this deal is basically-

She owner finances to us while we owner finance to them and I can't figure out how to structure that so that everybody (I mean especially us, but still everybody) wins.

Please take pity on my poor tired brain.  Don't want to freeload.  Would be happy to stuff envelopes or do a little bit of whatever remote work I could do for your business in return.

Thanks, BP!

-Ryan

[Dan Bryskin]

@Ryan Pozzi, not sure whats the question here:) Sounds like a perfect deal to me. Buy it with say 10 year balloon on money mortgage, write it so terms permit a wrap around contract. Sell it with 5 years balloon on contract for deed.  Take more for the down payment then you are going to pay, add 1-2% interest spread on the sell  side ... And if you are bored - bring me one or two of them sweet deals :)  

1. Money mortgage (preferred way for the buyer). You are the owner of the property and the other party acts as a bank. Standard foreclosure laws and protections apply. If you choose this rote, use the title company. They can help you in creating and recording money mortgage.

2. Contract for deed (preferred way for the seller). Seller remains the property owner until the contract is fully executed (last payment is made), buyer has benefits of ownership, but if something goes wrong, it's a contract termination not foreclosure. In my state forms are available from secretary of state, or use a real estate attorney. Make sure your contract is properly recorded with the state or you may face a fine.

Good luck.