Owner Financing as Exit Strategy

[Aksel A.]

Greetings,

This case may possibly be one of those classics, but doesn't seem to come as common, so I'm asking for posterity:

- I have an ongoing flip in terminal stages backed by an 80% rehab interest-only loan due in 3 months. The lender is able to execute to a long-term buy&hold refinance. I initially wanted to buy&hold, but now I just want to sell in order to jump to another potential deal.

- I have an interested buyer/investor interested in the property, but looking for an owner-financing deal and 20% down. His exit strategy is longer-term buy&hold.

The goal is to structure a deal where we perform owner financing on a property that has a backing mortgage.

I haven't talked to the lender about it, but was curious about whether, in this case, that was even possible.

I believe our vibrant community here can provide useful perspectives, and thanks in advance

[Account Closed]

Originally posted by @Aksel A.:

Greetings,

This case may possibly be one of those classics, but doesn't seem to come as common, so I'm asking for posterity:

- I have an ongoing flip in terminal stages backed by an 80% rehab interest-only loan due in 3 months. The lender is able to execute to a long-term buy&hold refinance. I initially wanted to buy&hold, but now I just want to sell in order to jump to another potential deal.

- I have an interested buyer/investor interested in the property, but looking for an owner-financing deal and 20% down. His exit strategy is longer-term buy&hold.

The goal is to structure a deal where we perform owner financing on a property that has a backing mortgage.

I haven't talked to the lender about it, but was curious about whether, in this case, that was even possible.

I believe our vibrant community here can provide useful perspectives, and thanks in advance

 If I understand the question correctly, you would go ahead and do the refinance to long term financing, (be aware that the note probably has a "Due on Sale" clause), you would meet the minimum occupancy term requirement, sometimes 6 months, sometimes 1 year, (read the agreement) and then sell to your buyer on a Wrap. Make sure you disclose to your buyer that there is a Due on Sale clause and meet the minimum requirements of your agreement with the bank.