Contract for Deed strategy?

Question

IS there any kind of strategy where I can sell a contract for deed to another person for a contract for deed?  For example, if I buy a property on a contract for deed at $120k, 10k down and 6% interest, am I able to sell this contract for deed to another buyer on a contract for deed at $155k, 25k down and 7% interest?  Please let me know.  Thank you.

Brian Gibbons · Answer

Hi, you are talking about Sandwich Land Contracts, where you buy (In Minnesota) on a Land Contract, and then sell on Land Contract.

I advise you get an attorney that has court experience re: Land Contracts.

I found this MN attorney's explination:
http://www.jphoffmanlaw.com/realestatelaw_faq.html
No affiliation, so be skeptical and careful.

Some states are really awful w/ Land Contracts, and some are terrific.  I like GA, can foreclose easily and quickly.

For those who do not know Installment Sales, the IRS allows anyone to buy and sell residences.

What is allowable by Tax Law and by individual State Law is not always congruent.  See Texas.

For IRS: See http://www.irs.gov/taxtopics/tc705.html

Brian Gibbons   :lol:

Marc Faulkner · Answer

You can buy on a contract and then turn around and sell on a contract both using installemnt sales methods,  The key is to make sure that the terms of the contract that you use to puchase with spell out that you can re-sell and make sure there is a due on sale clause in the contract that you use to sell with.  You may want to look into other options as far as what type of contract that you use such as land contracts, trust deeds, note and mortgages, etc.  I am not sure what state you are in but, they all have advantages and disadvantages and different documentation.  Check out the archives searching for the terms "wraps" or "wraparound mortgages" which is esentially the stradedgy you are looking for.  It can be a great way to make some money with little or no money down if done correctly.  Again I would look into using differnt types of contracts as I am not a big fan of contracts for deed for reasons mentioned above.

Greg P. · Answer

I'm very confused.  I've been on a contract for deed before and sold it with no problems.  Can anyone chime in on this?

Nick J. · Answer

I would never BUY contract for deed simply b/c you don't own the house and you can't sell what you don't own.

In a contract for deed as I'm sure you're aware of, you don't get the deed until you fulfill the terms of the contract, basically a rent-2-own with a fancy name. If I don't own the property then I'm not interested which is why I love Sub2.

I would sell contract for deed though, but I'd prefer a L/O with a shorter term

Contract for Deed strategy?

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