Rehabber · Fort Worth, TX · Member since 2013 · 26 posts · 0 votes
My company is embarking on a new strategy called the "Reverse Close" system. In a nutshell, we find the real estate deal and the home buyer, and we provide the exit strategy for the investor. We START with the motivated buyer who wants owner-financing, hence the name "Reverse Close".
The benefit to the investor is a built-in exit strategy that includes a double digit return through owner financing and a built-in profit when the home-buyer refinances the note.
If you are interested in learning more about becoming an investor in our Reverse Close program, please reply to this post or send me an email at [email protected].
Los Angeles, CA · Member since 2013 · 169 posts · 27 votes
12y
@Eric Dailey Hi Eric, while I'm familiar with lining up a buyer before you invest in a property, I'm curious about the owner financing part. Didn't the CFPB put a hold on owner financing actions, requiring certain qualifications with the SEC which inhibited non accredited investors from offering financing?
Rehabber · Fort Worth, TX · Member since 2013 · 26 posts · 0 votes
12y
@CoreyDavis Hi Corey, First - there are no securities being offered here. We are not inviting people to invest capital in a fund or a project where the investor exerts no effort or control. With our program, the same rules apply to the you the investor as if you were structuring the deal yourself and using owner financing as an exit strategy. The investor still coordinates the HML and the rehab work. My company brings the home buyer and the real estate deal to the investor, and we service the note for the owner-financing.
I admit that I am no expert on Dodd-Frank or the SAFE Act, but my wife and I have been doing our best to educate ourselves on the rules and regs as much as possible. Owner Finance is still possible even in today's market with the new regulations. In Texas, a person or entity can originate up to three Owner Finance notes per year without using an RMLO. And if you are not going to use an RMLO for the first three owner finance deals, you still should make sure that the rules are followed for a Qualified Mortgage - such as document your due diligence to ensure that the home buyer can afford the loan and you follow the guidelines for interest rates and conditions (such as no balloon payments). We perform the due diligence part up front so the investor doesn't have to.
I hope this clears things up a bit. If not, please ask away and I'll go back to my lawyers and see if they can shed light on answers to any questions. If there are any Dodd-Frank/SAFE Act experts out there that want to chime in, please do!
Real Estate Investor · Louisville, KY · Member since 2014 · 34 posts · 4 votes
12y
@Eric Dailey,
I know of a program where the residence is flipped back to the home owner who is upside down in his arrangement with the bank. It has to be a non confirming loan, meaning its not owned by either Freddie or Fannie.
How it works is,the note is bought from the bank at a discount of say 65%, LTV and provided bridge financing until home owner can be taken out with a long term conventional loan. It's a win win win for all concerned.
Rehabber · Fort Worth, TX · Member since 2013 · 26 posts · 0 votes
12y
Wayne - Sorry, I was not accurate in my description. What I should have said was that we help coordinate the owner financing arrangement between home buyer and investor. We do not actually service the note.