help me structure owner finance

[Wesley C.]

So I'm set to get conventional financing on a home that I will rehab and rent. Everything is on track until one of my associates tells me his son in law just got green card from England and needs a house and wonders if I'll sell him this one pre-rehab as owner finance. I have never done such a transaction and frankly have no idea what I'd do. He has pen and paper and is trying to make up terms, but I'd like to have my own favorable terms to come back with. Basically he is set to pay me more than I am buying for just so he can get an owner finance on the deal. If it matters I'm buying the house for $117,500 which includes seller paying $2500 closing and was planning on putting $10K into it doing the work myself. ARV is $155K but I wouldn't be doing any repairs whatsoever in this case. I feel like he'd be happy to pay $130K or so for it with some money down with me financing for 3 years then he'd refinance conventional. Should I entertain this and if so how should I structure it?????? This wasn't the original plan, but I'm always open to making a quick buck without lifting a hammer. But admittedly I'm a fish out of water on this one. Suggestions?

[Bill Gulley]

Wesley, off hand I would suggest you lease it and do a seperate option contract. The option can be a set amount and financed and paid outside the lease. Such an option showing payments will be accepted by any lender when and if he buys.

Part of the reason I lean this direction is due to the Safe Act with this property being a non-owner occupied and the fact that you will have a loan outstanding. This is just cleaner than a Sub-2 or a Contract For Deed arrangement.

Be sure to check TN. laws concerning options and installment contracts on a residence.

If you had lived in the property before selling you wouldn't have many of the concerns with seller financing under the Safe Act ...