Can I be a bank when I sell my property?

[Nickolay S.]

Hi everyone. I want to buy a property using cash, do some repairs to increase the value than buy it from myself (using another Corp.) by getting mortgage with 20% down and 4,5% per year and than sell it to someone who can’t get a mortgage (let’s say someone who don’t have a green card, but can work in the US) with 25% down and 9-12% per year. It’s basically rent to own. So another person will pay for the house, and I’ll make about 4% without investing my own money. Is this a smart idea or not really? What my risks are? 
thank you!  

[Will Barnard]

Originally posted by @Nickolay S.:

Hi everyone. I want to buy a property using cash, do some repairs to increase the value than buy it from myself (using another Corp.) by getting mortgage with 20% down and 4,5% per year and than sell it to someone who can’t get a mortgage (let’s say someone who don’t have a green card, but can work in the US) with 25% down and 9-12% per year. It’s basically rent to own. So another person will pay for the house, and I’ll make about 4% without investing my own money. Is this a smart idea or not really? What my risks are? 
thank you!  

The part about selling to yourself- you are likely going to run into lender problems here. The better and cleaner way to go is either get a temp loan (conventional, private, hard money, etc), do the repairs, then Refi the home into a conventional amortized loan. Another option is get a loan where it is construction to perm meaning they lend you the money to purchase and fix (you will have to put up some money into it), then once complete, the loan terns to a permanent amortized loan. Then you can do your seller financing or lease option but check with your resale estate attorney on lease options, very easy to break the law on those.