How to owner financing with the new dodd frank law

[Chip Chronister]

First thanks for all of the post about Dodd Frank and it has my head spinning.

In the past I have done some owner financing and L/O (with rent credits)

I plan on doing more that 3 this year and I would like to know from people on this board how they are going to do their deals. The law states that you can do no more that 3 per year per entity. What do you describe per entity? Can you do 3 in a separate trust, or each deal in its own trust? Can you just build an LLC for every 3 deals?

Right now I am giving my buyers a L/O purchase with no rent credits and in 1 to 2 years then I will owner finance them (giving me some time to figure things out), Now since I cant give them a rent credit per month can I put a price on the house and say drop it 5% if they make all of their payments on time?

[Bill Gulley]

I realize that there are those who advise trying to do the amount allowed under one entity and then moving on to another entity.

IMO, totally bogus.

The SAFE Act, which is adopted by the Dodd-Frank Act states that "any method devised" that may be adopted to circumvent the intent of the Act will be included as to meeting the requirements.

"ANY METHOD" seems pretty clear to me, it means anything that can be devised by mankind.

The issue is who is behind the door, in other words, if one person or the same persons open 100 companies the business dealings still flow back to that person or persons. It is a ploy, a method, a structure employed to circumvent the intent of the law.

Some are saying going with you wife, husband probably including the kids. Well, you have the same issue. There are marital interests, community property rights and the matter of comingled funds that bring these sales to and for the benefit of that family, again, a ploy or method employed to circumvent the law.

How do you do seller financing, use a mortgage originator! If you want to do 50 deals a year, form your entity and become compliant to do business!

Gotta say, this mentality by investors reminds me of my sons as teenagers, they would go to the ends of the earth trying to figure out some excuse or activity to get out of chores. It took awhile for them to mature and realize that more time was wasted and effort expended trying to get out of things than just getting things done. Ahhh, and they would enlist their friends in all kinds of ploys, some of those friends would suggest things or advise them as to ideas they could use to avoid what had to be done.

Some kids just don't grow up. :)