Creative financing option

[Amy Crowther]

We have an 8 bed 6 bath home in Houston that we renovated. We were approached with a creative financing offer and it sounds really shady. We are open to it being rented out or bought for an assisted living space. We just can not track down this investor and think they will leave us with a bankruptcy. We do not want to be a lender or have our name taken off the title unless they can pay the “due on sale” mortgage. 
I don’t want to be convinced that the quick money will be better than waiting it out for an offer that makes more sense. We are new to creative financing, so any tips or advice or even pointing us to the right professionals would be great. 

[Ellis San Jose]

Amy,

You are smart to ask A LOT of questions about the borrower.  Make sure the down payment is high enough to make sure the buyer/operator think's twice maybe 3 times about walking away.  

I'm not an attorney so please consult one in your state to make your decisions.

You could propose they master lease the property as a trial period BEFORE you agree to purchase terms which would transfer title. 

If there is an existing mortgage in your name it should be disclosed that your name will stay on the loan for possibly a very long time.  You could negotiated a limited term where they MUST refinance & pay off the loan.  Just weigh all the possible exit strategies.  A ethical investor who discloses the pro's & con's of subject to transaction could be a win win for both. Just go in with both eyes open.