Seller financing and subsequent line of credit

[Tarik N.]

I am in the process of purchasing two properties from the same owner via seller financing, and I have the following question: Since title is transferred to me on the day of closing, can I that same day (or later) obtain a loan or line of credit against those properties? 

Basically, that would be my plan, but I want to make sure it's possible before I commit.  I would appreciate any insight.

Thank you.

[Mike Weiss]

Since the others have answered your question regarding pulling out cash on a newly acquired property, (BTW - its called "cranking" a property for cash) I will address the benefits of seller financing. If you read the security agreement/mortgage/trust deed, it clearly spells out the remedy for non-payment or other abuses of the property/security. How else would a bank / note holder protect themselves? What if you were the seller? Wouldn't you want to be protected?

One more thing regarding your plan to pull out cash at closing -- you now have 2 payments to make. Will the property support it or not?

OK - some seller financing benefits off the top of my head:

Fast closing. -- get the title work done, arrange your down payment and the deal is ready to close.

No qualifying - bad credit is OK.

Terms, terms, terms. 

No payments, quarterly payments, ZERO interest - you and the seller agree to terms.

Ability to renegotiate the terms if the need arises.

Able to move the security to another property.

Able to payoff some or all of the balance at a discount.

Keep us posted,

Mike Weiss