Looking for Solutions for SFR rentals in Kokomo, IN

[James Park]

Hi all,

I have a conundrum and trying to figure out what to do, so figured I'd throw it up on BP and see if anyone else had any thoughts :)

I own 4 single family homes in Kokomo, IN.  They were all purchased with a land contract - that means the seller stays on title until they are paid off.  In other words, I'm not on title until I make my last payment.  That's how it works in the state of Indiana.

Each of the four homes are in varying conditions.  I've rehabbed two of the homes which are in good condition.  Two are not rehabbed and in decent condition. I'd like to sell them at this point instead of renting them out.  I own 4 mobile home parks and don't want the headache of owning these SFRs anymore. I'd like to focus on my parks.

I've put them on the market, but the market has slowed.

Long story short, I haven't been very happy with my results after putting them on the market.  So I've started to consider different options.

I want to pay them off and put them in my name.  Then sell them under land contract to someone else.  There is a huge demand for people with a strong income history that won't or can't use bank loans to buy property.  These people have very little money to put down, but can demonstrate the ability to easily pay a good amount each month ($850).

What I want to do is pay off the balances on each, take title to my name, then sell them each on land contract to a buyer.  I can easily fetch a 20% higher price (or more) this way and get 8-10% interest.  These buyers don't care what the price is as long as they are extended a loan (with very little down) and can afford the monthly payments.  So for instance, for a home that I can sell retail on the market, I can fetch $90K, but I can sell it on land contract to someone for $120K.

So the plan was to get a bank to refinance the homes and cash out what I've invested into them.  Then pay the bank roughly $350 per month and collect $850 per month from the tenant/buyer.  I'd pocket $500 per month for each home and I'm not responsible for the insurance, taxes, maintenance, etc.  Great deal right!?

Problem is, the bank won't provide me with financing.  I've been a full time real estate investor for only two years and they are not comfortable with my income history.  This is a bank that works with a lot of investors, so they were my best bet.  

So I looked at hard money lenders, but almost all have minimum requirements of a $75K loan per property.  That's too high for these homes. Many also won't work with land contracts.

So short story long, I'm looking for private lenders to assist in this scenario.  It can be either short term or long, up to you.  I should be able to refinance after a couple years pretty easily if needed.  Happy to keep the loan going for the long term too, if that's what you're looking for.  Can provide a good interest rate as well that's secured by a nice single family home in a growing area.

Here are the addresses of the homes in case anyone wants to look into them:

1) 1420 S Main St, Kokomo IN

2) 1429 S Main St, Kokomo IN

3) 711 S Wabash, Kokomo IN

4) 210 N Indiana, Kokomo IN