Anyone still owner financing for buyers that want to occupy?

Question

I am just curious to see if anyone is still taking notes on properties when a tenant buyer wants to move in.  Or lease option, land contract etc. If so what steps are you taking with the Dodd Frank law coming into effect.

Bill Gulley · Answer

Jay, better check on the mortgage` servicing side, originations on your old contracts won't be a problem.

I suggest everyone stay away from contract for deeds or land contracts as they use to be used as there are issues with pre arranged deeds in lieu of foreclosure circumventing state foreclosure laws. Many may think they can or even go to foreclosure if a buyer kicks, but there is also the issue of wrongful foreclosure after the fact. You could do an installment contract with a change to the default provisions and perhaps having options with foreclosure, but doing that, you might as well do a note and deed of trust or mortgage.

Deals to the poor in C areas will probably lead to problems, there is a crack down on predatory lending regardless of what the deal is with small borrowers.

Most any installment deal that was done 3 years ago is most likely illegal now if the laws apply to that borrower or property, much less the deals done by old timers that have been done for decades, those are pretty much out the window. So, getting into a deal now, the new restrictions need to be addressed.

Big penalties too. Tenants can get the past three years rents back, lenders can lose the note entirely. It can be bad.

I'd do a seller financed deal in a heart beat with a qualified buyer on a nicer home and doing so in compliance. At 65/70/80K a buyer should be able to pay the costs of compliance with a mortgage originator. If you can carry it, no problem, just get servicing.

These` are different remarks, somewhat, in saying yes you can, doesn't mean not to consider my hammering away on this stuff in other posts. L/O can be an issue. Many of the L/O deals done aren't even the real option, they have morphed into installment contracts. :)

Brian Gibbons · Answer

Hi Jarred,

I am doing acquisitions (buying) sub2 and lease options, and selling on a straight lease and pure option, and having all tenant buyers go through a RMLO regardless before they move in.

See

http://www.biggerpockets.com/search?utf8=%E2%9C%93&term=Brian+gibbons+Dodd+Frank#topics

Lots of Dodd Frank info there.

@Bill Gulley too.

Brian Gibbons · Answer

I really enjoyed reading @Bill Gulley post above.

Redemption of a "Contract for Deed like contract" ie what are your options if the seller defaults is a big issue.

See your lawyer and your RMLO.

"You could do an installment contract with a change to the default  provisions and perhaps having options with foreclosure, but doing that,  you might as well do a note and deed of trust or mortgage."

Look at

• wraps - AITDs and
• sub 2 w or w/out a note - DOT for acquisition.

A B C D areas.

Look for A and B areas for creative financing, not C and D.  A and and B are above the median, pretty houses, best schools.

There are 20 million houses with little or no equity.  Some areas are looking at price drops see

http://www.inman.com/2014/05/12/home-price-growth-cools-but-unsustainable-and-unhealthy-in-some-large-markets/#.U4ZCrijijy4

Affordability - credit at 43% DTI is an issue for many buyers.

http://www.homebuyinginstitute.com/news/fha-debt-to-income-296/

Your business plan:

Look at A and B neighborhoods.

Market to

• wholesalers that have leads with no equity in A and B neighborhoods.
• listed houses,
• expireds,
• landlords,
• fsbos, and
• houses purchased at the top of the market (2006 - 2008) for low equity.

Offer lease option assignments, sub2 purchase or wrap purchase, use a RMLO and a good lawyer.

Market for Owner financing buyers.

• Give speeches to Rotary, Lions, Chamber, etc. about solving problems for young families' housing
• Post cards to apartment buildings and rentals
• Write blogs about rent to own, credit being tight, etc.
• Create a meet up group for "Get Your Lease 2 Own Home Now"

BOTTOM LINE.

SOLVE PROBLEMS FOR SELLERS AND BUYERS.  MAKE A PROFIT.

You always find the finest fishing holes where the AVERAGE fisherman is afraid to go.

Jay Hinrichs · Answer

I am very interested to hear the response's on this one Regarding the Safe act and owner contracts for Owner Occ homes.. As opposed to owner contracts for Non owner occ.  I did a bunch of them pre Dodd Frank on my OREO.. in the C class area they are totally hit and miss with many more misses than hits. But they did serve a purpose.. I took a house that I did not want to dump a bunch of money in and let someone in for next to nothing with the hopes they would at least fix it up.. At the very least fix the AC and Exchanger put a water heater in it new power metor and pole and gas hook up.. But in the C areas that was about the extent of their ability.. I still have a few that I collect a payment once a year when they get their tax return. AND oh they pay the property tax.. which was huge because we had 200 or so of these buggers . But when I visit them once a year they still are living in the house half the time with no heat excetra. they own it I deeded it too them.. So I don't have landlord tenant issues. So we just kind of dance around.. I don't want the place back. and If I can get 3 or 4k a year out of it I am good with that.

Anyone still owner financing for buyers that want to occupy?

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