Owner Finance How does it work?

[Danny Dang]

Hello this is my first post. I'm about to buy a 4 plex in Arlington, Tx and the owner will be doing the financing. Where or what should I do to protect myself? What if he just takes my money and still keep his 4 plex? Who or what should I get involed to land this deal?

Thanks for help in advance. This would be my first deal ever on real estate investing! I hope it goes ok!

Danny

[Gautam Venkatesan]

@Danny Dang

1. Get a professional inspection of the property to determine if repairs are needed.

2. Get actuals on rents, expenses, etc. from the seller so you can accurately calculate cap rate, property value, NOI, etc to confirm the numbers work for you.

3. Use a TREIC contract for your purchase agreement.

4. Use a real estate attorney to draw up the paperwork.

5. Close at a title company and obtain lender and owner title insurance. 

6. Use a 3rd party note servicing company to service your payments; do not send monthly payments direct to the seller. The note servicing company will make sure taxes, insurance, underlying mortgage are paid before sending the seller any remaining monthly funds.

This is by no means an exhaustive list just a start. You may want to work with a MF realtor to hold your hands and pay them a fee especially for your first deal.